|
Getting your Trinity Audio player ready...
|
The price of MATIC, the token powering the popular Layer 2 scaling solution Polygon, has been under pressure in recent days. Over the past week, MATIC has shed 10% and now sits precariously close to the lower boundary of a horizontal trading channel it’s been confined to since mid-April.
This price range, typically formed during periods of consolidation, indicates a balancing act between buyers and sellers. However, a recent uptick in bearish sentiment threatens to tip the scales.
Bearish Signals Mount for MATIC
At the time of writing, MATIC trades at $0.63, its lowest point since October 2023. The token’s price has been oscillating between resistance at $0.75 and support at $0.64 within this established channel. However, a concerning trend is emerging.
On-chain data reveals a negative weighted sentiment towards MATIC, currently sitting at -0.64. This metric analyzes the volume and sentiment of social media mentions to gauge overall market perception. A negative value indicates significantly more negative mentions than positive ones, suggesting a growing bearish bias.
Further confirmation comes from MATIC’s declining futures open interest. This metric tracks outstanding futures contracts and has dipped 8% since June 1st, to $197 million. This suggests traders are closing positions without opening new ones, a classic bearish signal.
Momentum Indicators Flash Oversold
Technical indicators like the Relative Strength Index (RSI) and Money Flow Index (MFI) paint a similar picture. Currently at 36.44 and 26.11 respectively, both indicators suggest MATIC is oversold, meaning selling pressure outweighs buying pressure.
Also Read: Polygon (MATIC) Stuck In Two-Month Range: Will June Ignite A Breakout Or Bring More Woe?
If this trend persists, MATIC risks breaking below the crucial $0.64 support level and potentially dropping to $0.61.
Can the Bulls Hold the Line?
A glimmer of hope remains for Polygon bulls. If they can successfully defend the $0.64 support and sentiment flips positive, a potential rally towards the upper limit of the channel at $0.67 becomes a possibility.
However, overcoming the current bearish pressure requires a shift in market dynamics. Only time will tell if MATIC can find its footing or succumb to the downward pressure.
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
