• MATIC price action shows several entry opportunities for both sides of the market.
  • A long entry opportunity exists after confirming that a bear trap pattern has formed.
  • A possible short entry opportunity is currently developing but has stricter entry conditions.

MATIC price may be nearing the end of its pull-back after reaching the new multi-month highs back in late October. Buyers have stepped in to support MATIC and could surprise a lot of new short sellers.

MATIC price is positioned for long and short opportunities; buyers have the advantage over the bears

MATIC price has a theoretical long trade setup ahead. That bullish entry idea is a buy stop order at $1.975, with a stop loss at $1.875 and a profit target of $2.50. This long trade setup is based on a breakout above a double-top that would confirm an overwhelmingly bullish Point and Figure pattern known as a Bearish Fakeout. The Bearish Fakeout pattern occurs when two boxes of Os fall below a multiple bottom, but then, the next X-column creates an entry after a multiple-top. The Bearish Fakeout often generates short squeeze plays because many short-sellers who enter too late get caught on the wrong side of the trade.

$0.025/3-box Reversal Point and Figure Chart

The rules for the Bearish Fakeout pattern state that if one more O forms below the current O column, then the Bearish Fakeout pattern is invalidated. However, given the volatile nature of cryptocurrencies, a little leeway could be considered appropriate. This trade is invalidated if MATIC price drops below $1.75

On the short side of the market, the hypothetical short entry is a sell stop order at $1.75, a stop loss at $1.95 and a profit target at $1.05. However, there is a caveat to this short entry. However, the short entry is only valid if a triple-bottom (regular or split) develops at $1.80. This means that MATIC needs to print at least a 3-box reversal to print a column of X's before reversing again to create the triple-bottom.

$0.05/3-box Reversal Point and Figure Chart

The hypothetical short setup is invalidated if MATIC moves above $2.00.


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Recommended content


Recommended Content

Editors’ Picks

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.

More Altcoin News
Shanghai court confirms legal recognition of crypto ownership

Shanghai court confirms legal recognition of crypto ownership

A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.

More Cryptocurrencies News
BTC hits an all-time high above $97,850, inches away from the $100K mark

BTC hits an all-time high above $97,850, inches away from the $100K mark

Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP