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Polygon’s MATIC Could Face A Correction

ByCrypto Briefing
AuthorCrypto Briefing
Published 07/24/2022, 12:41 AM

MATIC/USD looks shaky as technical indicators point to a brief correction in the near term.

Key Takeaways

  • Polygon’s MATIC token has soared over the past month.
  • MATIC now appears to be trading in overbought territory.
  • A downswing below $0.77 could trigger a correction to $0.58.

Polygon looks primed for a retracement after soaring in market value over the past month. Still, a massive area of support may help its price hold.

Polygon Forms Local Top

Polygon appears to be preparing for a correction, but it has yet to break through a vital support cluster.

MATIC has enjoyed a rally over the past month. It surged by more than 200%, rising from a low of $0.32 to a high of $0.98 on July 18. Given the significance of the upswing, the token is now trading in overbought territory.

The Tom DeMark (TD) Sequential indicator has presented a sell signal on MATIC’s daily chart. The bearish formation developed as a green nine candlestick, indicative of a one to four candlesticks correction. The pessimistic outlook was strengthened when the current red two candlesticks began to trade below the previous red candlestick.

However, MATIC holds above a significant support cluster represented by the Parabolic SAR, the 100-day moving average, and the 78.6% Fibonacci retracement indicator at $0.77. A daily candlestick close below this critical interest zone could result in a spike in downward pressure, potentially leading to a 22% correction toward the 50-day moving average at $0.58.

MATIC/USD Daily Chart

Source: TradingView

MATIC will likely need to break the July 18 high of $0.98 to invalidate the pessimistic outlook. Slicing through this vital resistance level could give it the strength to advance toward the 200-day moving average at $1.20.

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