MATIC price could slide 15% lower as Polygon bulls tire out

MATIC price upside is limited as it faces a bearish breaker, extending from $1.75 to $2.15.
A rejection at this hurdle could see Polygon drop 15% to a support level at $1.44.
A daily candlestick close above $2.15 will invalidate the bearish thesis.

MATIC price has created a bearish setup that forecasts a correction is around the corner. However, the downswing might be cut short due to the presence of a palpable support level along the way. Regardless, polygon holders should prepare for a minor pullback.

MATIC price to head lower

MATIC price set up a higher high between December 8, 2021, and December 27, 2021. The trough between these two swing points established a demand zone, extending from $1.75 to $2.15.

However, the flash crash on January 21 pushed Polygon to produce a daily candlestick close below $1.75, flipping the said demand zone into a bearish breaker. This setup forecasts that a retest of the breaker leads to rejection and a potential crash.

As MATIC price retests the breaker for the third time, investors can expect another rejection to lead to a 15% retracement to the daily support level at $1.44.

A breakdown of the $1.44 barrier could lead to a retest of the $1.22 foothold. In a highly bearish case, MATIC price could sweep below the $1.04 weekly support level and collect the sell-stop liquidity resting below it. This development would bring the total crash to 40%.

MATIC/USDT 1-day chart

Multiple retests of the $1.75 to $2.15 bearish breaker weakens its potency and could signal that the bulls are making a comeback. If MATIC price pierces through the said breaker to produce a daily candlestick close above $2.15, the bearish thesis will face invalidation. In this scenario, MATIC price could rally 14% and tag the $2.45 hurdle.

Share: Cryptos feed

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.