fxs_header_sponsor_anchor

Why Polygon’s MATIC bulls could be too eager and drop the ball on this rally

  • Polygon price action has been flip-flopping between profit and loss this week. 
  • MATIC price could be seeing the end of the summer rally as tailwinds look to be diminishing.
  • Should bulls go in too aggressively for the pop above $0.96, expect to see a violent squeeze and bull trap.

Polygon (MATIC) price action has been on treading nervously this week, with weekly earnings switching back and forth between profit and loss. It all comes down to trading this Friday to see if bulls can eke out a winning week. Along with that comes the risk they might be in for a negative treat if they go in for the pop above $0.96, where bears will be waiting with a bull trap and squeeze back towards $0.80. On the other hand, patient bulls calmly riding out the bullish triangle formation will be rewarded with a profit near $1.10.

MATIC price sounding the alarm for a bull trap

Polygon price sees bulls eagerly attempting to eke out a weekly gain in the price action, which is quite understandable given the summer rally since the beginning of July. Along with that strategy comes a risk of overshooting as bulls will try to break and close above July 20, 2021, high and possibly even target $1.00. But it is probably too soon to expect, as the summer period is trading on thinner liquidity. From a technical point of view, the bullish triangle also has plenty of room to go before triggering a breakout.

MATIC price could see bears coming in hard on a break above $0.96. Bulls could get trapped on their entries in the break above $0.96 and see their positions pulled down towards $0.80 near the monthly pivot and the green ascending trend line. That would be a roughly 17% negative carry, which plenty of bulls will cut beforehand, giving bears free room to move in.

MATIC/USD Daily chart

Several traders will have identified the bullish triangle with the green ascending trend line and the High of July 20, 2021, as a base for the triangle. Expect a return towards more support around $0.80-$0.90 soon, depending on the timing, to scope up some more investors and provide fuel for the breakout. Anything sooner could be, as mentioned in the above paragraph, likely short-lived. 

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.