The MATIC price is up 35% from last weeks low and still in a long-term uptrend but should longs use the strength to reduce risk?
Polygon (MATIC) is down around 5% at $2.100 in early trading Monday. Despite the mild correction, the MATIC token has gained 45% in the last month and almost 250% from the July lows. But considering the uncertainty surrounding the cryptocurrency market, now could be an excellent time to take some money off the table and reassess MATIC’s medium-term potential.
The MATIC price has outperformed recently. Even after Bitcoin and Ethereum pulled back from their all-time highs, Polygon was one of the few cryptos that continued to trade well. As a result, Polygon’s market cap is approaching $15 billion, which should see it overtake Shiba Inu to become the 13th-most valuable crypto.
Polygon Price Forecast
In isolation, Polygon’s prospects look constructive. However, my concerns are regarding the market as a whole. Bitcoin’s price action is sluggish and is likely to remain that way for the foreseeable future. Furthermore, due to the FOMC’s hawkish taper timeline, broader macro conditions are breaking down.
Subsequently, the tailwind for crypto prices is dropping off. Furthermore, trading conditions are likely volatile and illiquid over the festive period. Therefore, Polygon could experience wild swings in price over the next two weeks. That’s why, in my opinion, closing or reducing profitable trades into year-end is often a sage move.
If the market turns lower, a logical destination for the MATIC price is the 200-DAY Moving Average at $1.443, around 40% below the current price. Looking at BTC and Ethereum today, the chances of Polygon testing $1.443 in the next week or so is high. Furthermore, a broader market risk-off could extend MATIC towards $1.000
Of course, cryptos often defy logic, and on that basis, Polygon could continue higher even if the market turns. Subsequently, a close above $2.500 invalidates my bearish view.
MATIC Price Chart (Daily)
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