fxs_header_sponsor_anchor

MATIC develops major bearish breakout pattern that could revisit $1.75

  • MATIC continues to test the upper trendline of a rising wedge.
  • Warning signs of support failing could initiate a 31% drop.
  • Upside potential remains but is likely limited.

MATIC price action has recently generated significant warning signs regarding how much higher it can move over the short term. The past seven days have seen testing the upper trendline of a broader rising wedge pattern that has existed since September 2021.

MATIC price could drop over 30% and below the rising wedge pattern, liquidating many long positions

MATIC price is on a knife’s edge for bulls. MATIC is right on top of the upper trendline of a former rising wedge pattern on the daily candlestick chart. This represents the seventh major test of that trendline as support or resistance since November 2021. Contributing to the significant bearish warning signs present is the pattern developing on the $0.05/3-box reversal Point and Figure Chart.

There is a head-and-shoulders pattern and a quintuple-bottom bearish breakout trade setup for MATIC price. The theoretical short setup is a sell stop order at $2.40, a stop loss at $2.60, and a profit target at $1.75. This trade idea represents a 3.25:1 reward for the risk with an implied profit of 26% from the entry. A two-box trailing stop would help protect any profit generated post entry.

MATIC/USDT $0.05/3-box Reversal Point and Figure Chart

However, one of the most sought-after bullish patterns in Point and Figure is also developing for MATIC price. The Bullish Catapult pattern will be complete if the current X-column moves up to $2.75. That would invalidate the theoretical short entry.

The hypothetical long entry for MATIC price from the Bullish Catapult is a buy stop order at $2.75, a stop loss at $2.55, and a profit target at $3.35. This trade represents a 3:1 reward for the risk with an implied profit target of nearly 23% post entry.

MATIC/USDT $0.05/3-box Reversal Point and Figure Chart

The long idea is invalidated if the short entry were to trigger first.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.