When the Polygon price broke $1.0000, the writing was on the wall. MATIC lost a further 20% after 8 back-to-back down days. Whats happens now is critical.
MATIC is trading at $0.7941, higher by $0.0001 (+0.02%).
A 24% decline in the last 7 days has wreaked havoc on Polygon. Its market cap has dropped to $5 billion, ranking it as the 20th-largest cryptocurrency behind Ethereum Classic (ETC) and just above the struggling Internet Computer Protocol (ICP).
Sadly for Polygon holders, the price action is not reflective of the protocols promising long-term prospects. It is, however, reflective of the current state of the crypto market, and in particular, altcoins.
Even though Bitcoin is still clinging to life above $30,000, alts have fared much worse. This is understandable considering the outperformance earlier in the year, which ate away BTC’s market dominance.
However, when confidence returns to the market, MATIC should once again outperform on the upside. When that happens is anyone’s guess. But unless the Crypto space is on the verge of a new nuclear winter akin to what followed the 2018 crash, at some stage, prices will recover.
MATIC price forecast
The daily chart highlights the strong downtrend from May all-time high of $2.8988. Over the last two months, the Polygon price has attracted sellers at increasing lower valuations. However, the last time the price traded this low, on the 23rd of May, it fired the pistol on a race 266% higher to $2.4828.
Although, at that time, the market was still drinking the cool-aid, and the sentiment was nowhere near as damaged as it is today. Therefore, this is unlikely to be how the current move plays out.
Countering the descending trendline, strong horizontal support is visible at $0.6800. The trend from April could be considered the trigger point for the 326% rally that followed in May. Therefore, this is both significant technical support and a psychological one.
Just below the horizontal barrier, we see the 200-day moving average at $0.6537. This reinforces the $0.6800 level and provides a backup parachute should the first fail.
However, if both chutes fail, we know what comes next. In this event, gravity should prevail, and MATIC could fall to earth around $0.2900.
However, the descending trend line is now at $0.8100, and just above the current price. And if MATIC manages to recover this level, the immediate downside pressure is relieved. Furthermore, a close beyond $0.8100 puts the Polygon price back on track to recover $1.0000.
Although given the trajectory, it appears a test of $0.6800 is imminent. And for the bulls, I hope the parachute inflates.
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Polygon price chart (Daily)
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