- MATIC has a firm bearish market structure and weak buying pressure.
- The retest of the $0.7 support could spark a recovery despite the recent downtrend.
Polygon [MATIC] rallied past the psychological $1 resistance on the 26th of December but has since been unable to defend those gains. In the past month, it has receded below the $0.76 mark.
This was the level where the impulse move to the high at $1.09 was initiated. It is possible that the MATIC bulls can defend this HTF support zone, but Bitcoin [BTC] was also in a downtrend. Hence, traders have reason to be bearish.
Examining the MATIC market structure
On the one-day price chart, the RSI fell below neutral 50 on 12th January and has been below it since then. This was when MATIC retested the imbalance (white) at the range highs after the rejection at $1.
The OBV has slipped below a support level that was defended in recent weeks. It approached another level that had importance since mid-November, but the downtrend of the OBV signaled a strong bearish presence in the past month.
If the OBV can climb upward while prices defend the $0.7-$0.72 support zone, a bullish market structure could give traders a reason to look for buying opportunities. Until then, a bearish bias was warranted.
The MVRV and mean coin age gave opposing signals
The weighted sentiment behind MATIC has been negative for the majority of January. The bearish engagement on social media while MATIC trended downward was expected.
So was the sharp decline in the MVRV ratio. It showed holders were at a loss and that the token was undervalued.
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An undervalued signal doesn’t mean it is a buy signal. Yet, the rising mean coin age was evidence of accumulation. The metric has trended higher since the latter half of November.
This idea supported the conclusion that the $0.7 region was a buying opportunity.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.