Polygon’s MATIC forfeits on key-level and must go in search of ammunition

• Polygon price is set to fade further in search of support before trying to reclaim lost ground.
• MATIC price could drop as far as 15% and endanger its summer rally.
• Expect to see support found after which MATIC will eke out the last gains in this rally.

Polygon (MATIC) is trading like one of the more popular first-person shooter games this week, such as Medal of Honor or Quake – and personally my own favorite:Return to Castle Wolfenstein (both the 80’s original and the remake of 2001). Those familiar with these games know that to get to the next level, you must find ammunition and aid kits to restore yourself to 100%. The same applies to MATIC price, which has been able to break above $0.960 over the weekend but got out of that level damaged and lacking the ammunition to make it  to $1.187. This is triggering a fall back below $0.960, in search of a secret stash room with bullish ammunition.

MATIC price sees traders in search of new clips

Polygon price is likely to see bulls backing off a bit and awaiting the right moment to jump into price action again. The strength of the setback shows that the bearish offensive is quite big, and it does not look like bears are planning to quit anytime soon. MATIC bulls have momentum going against them, therefore, and this is further exacerbated by the Fed’s still very much hawkish rhetoric.Adding to this gloomy outlook is that the feared month of September is nearing, which statistically is a bad month for cryptocurrencies. The window of opportunity is closing, but the bulls can still eke out solid gains if they play this right.

MATIC price is thus set to drop back to $0.800 levels near the green ascending trend line and the monthly pivot. Once support is found there, bulls can use either or both as a platform to bounce off. Once the high of July 20, 2021, has been reclaimed, expect to see a test for support before trying to rally towards $1.187, which is the high of July 04, 2021, and from there a break above the 200-day Simple Moving Average.

MATIC/USD Daily chart

Alternatively, global markets could start to set aside the Fed’s hawkish rhetoric and focus instead on headlines from the minutes  that suggested rate cuts are conditional and granted at a given time. That could mean a goldilocks scenario – where rates are ‘not too high, not too low, just right’ – could evolve . Should markets start to focus on that, expect to see the big guns come out, with hedge funds and institutional players starting to buy big chunks of cryptocurrencies, creating a massive tailwind to build upon, and MATIC price quickly booking 35% gains without shedding any value at first.