Disclaimer: The information presented does not constitute financial, investment, trading or any other advice and is solely the opinion of the author
While the first quarter of 2023 went smoothly, the second quarter so far has been completely bearish for altcoins. In particular, Polygon [MATIC] cracked the key support zone of $0.94-$1.05 in Q2. However, the plunge eased and U-turned before retesting December’s lows of $0.75.
According to CoinMarketCap, MATIC is up more than 8% in the past seven days. But the daily performance was dampened at about 0.7% after it hit a key bearish zone.
Will the bulls take the hurdle?
Source: MATIC/USDT on TradingView
MATIC cracked the bullish order block (OB) and the $0.94 – $1.05 support zone in early May, exposing the altcoin to increased selling pressure. Likewise, Bitcoin [BTC] also cracked a key support level at $26.6k before recovering strongly at the time of writing.
MATIC followed a signal from BTC and went for recovery. But the rally has a snag near the $0.94 level. Aside from dealing with the previous support of $0.94 – $1.05, the zone is also matching with a fair value gap (FVG) of $0.91 – $0.96 (red).
This could turn the obstacle into a strong bearish zone. But MATIC will reclaim $1+ value if cleared. Above this hurdle, the next target will be a bearish OB near $1.19.
Alternatively, sellers can stamp their check if bulls fail to get $0.94 – $1.05 in a support zone. Such price rejection would drag MATIC to $0.88 or $0.82.
The RSI and OBV rose in recent days, but the RSI was slightly above the neutral level. It means buying pressure and demand have improved, but prices could go either way.
Stock exchanges declined
Source: Sentiment
Is your wallet green? Account MATIC profit calculator
MATIC’s $1 value in early May exposed it to increased selling pressure, as evidenced by the spike in supply on exchanges (red line). After that, the stat eased, indicating less MATIC was being moved for sale on CEXs.
Rather, off-exchange supply increased, albeit slowly, highlighting the slow accumulation of MATIC by traders during the plunge.
Volume hit a new May record, rising above $500 million around May 27 after MATIC crossed the $0.90 mark.
But volume declined at press time, which could further undercut the bulls to evade the $0.94 hurdle. However, a BTC move to $28k could rally MATIC bulls to clear the hurdle.