Here is why falling bond prices this Monday are of importance for the Polygon price later this week

• Polygon price saw a negative move in the ASIA-PAC trading sell-off.
• MATIC is currently nearly unchanged for the day, but the risk of an accelerated down move enlarges.
• The bond market hangs against the ropes and carries risk assets with it.

Polygon (MATIC) price tanked slightly around the US opening bell as markets are still pricing in the turn of events from past Friday on the back of the US jobs report. With a steep increase in the number of jobs added and overall wages still growing, it seems that inflation is not going away quietly. For the whole of January, markets have been pricing in a Goldilocks scenario that predicted no recession and interest rate cuts in the second half of the year. MATIC jumped 64% on the back of that. With markets reassessing now that a tight labor market may offer up renewed inflation, that rally could halt and unwind.

Polygon price set to be rewarded as January trade went too far

Polygon price advanced nearly 64% since January 1 as markets ignored the warnings from individual central bankers who had continued to say interest rates would remain high. Traders did not ask enough questions and simply were riding along the trend, which pushed risk assets into recovery with some even erasing the incurred losses from last fall. The door got slammed on those same traders with the US jobs report last Friday when the expectation of 185k new jobs in January was destroyed by an official 517k figure.  The risk is that the US inflation number for later this week could be status quo, or worse, an increase. 

MATIC thus sees the weight of a risk premium being factored in. With the sharp decline in bond prices, yields are soaring, and the US Dollar is stronger. This translation into MATIC price has not happened but means that the green ascending trend line could soon snap and make Polygon price free fall to $0.96 in a 20% market correction.

MATIC/USD daily chart

If the green ascending trend line holds any downward pressures, and this Monday morning continuation gets snapped, a swing back to $1.30 could be in the cards. Although the Relative Strength Index has not traded further toward 50, there is ample room for some upside. Expect to see a test at $1.312 quite soon if this recovery continues into the week.