- MATIC has a solid bearish market structure and weak buying pressure.
- Retesting the $0.7 support could lead to a recovery despite the recent downtrend.
Polygon [MATIC] broke past the psychological resistance of $1 on December 26, but has not been able to defend these gains since. In the past month, the price has fallen below the $0.76 mark.
This was the level where the momentum 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 downward trend. So traders have reason to be bearish.
Research on the MATIC market structure
On the one-day price chart, the RSI fell below neutral 50 on January 12 and has been below it ever since. This was when MATIC retested the imbalance (white) at the highs in the range after the rejection at $1.
Source: MATIC/USDT on TradingView
The OBV has fallen below the support level that has been defended in recent weeks. It was approaching another level that has been of interest since mid-November, but the OBV’s downtrend indicated a strong bearish presence over the past month.
If the OBV can rise 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 justified.
The MVRV and the average coin age gave opposite signals
Source: Santiment
The weighted sentiment behind MATIC was negative for most of January. Bearish social media engagement was expected, while MATIC trended downward.
This also applied to the sharp decline in the MVRV ratio. It showed that holders had suffered a loss and that the token was undervalued.
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An undervalued signal does not mean it is a buy signal. Still, the rising average coin age was evidence of accumulation. The statistic has been trending higher since the second 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 advice and is solely the opinion of the author.