Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The $1.05 has posed stern resistance in the past two weeks.
- A revisit to the 12-hour bullish breaker and Fibonacci retracement level could be expected.
Polygon [MATIC] saw bullish sentiment rise in recent weeks. On-chain metrics showed a large uptick in the number of new users, and the price action of the native asset also highlighted strong demand behind the rally.
Read Polygon’s [MATIC] Price Prediction 2023-24
While the higher timeframe bias remained bullish, MATIC formed a lower timeframe range. At the time of writing, it approached the highs of this range, making another rejection likely.
The ten-day range has been respected so far, traders can look to enter short positions
A range between $0.92 and $1.03 was highlighted in orange. MATIC has traded within this range for the past 10 days. The lower extreme of the range coincided with a bullish breaker (cyan) from early December on the 12-hour chart.
The upper boundary has seen many candlewicks as high as $1.05, but no four-hour session closed above it in the past two weeks. Although a breakout was still possible, it was better to trade within the range than to seek a breakout.
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The RSI has formed lower highs in the past week, as has the OBV. This indicated muted buying strength. Until the liquidity pocket at $1.03-$1.05 is broken by a session close above $1.05, traders can look to short MATIC in that area. The profit targets are the mid-range mark at $0.98 and the range low at $0.92.
Futures market participants remain bullish
On 19 January, the price revisited the range lows and the 12-hour bullish breaker at $0.92. The very next day, MATIC bounced to the range high and caused numerous short positions to be liquidated. Coinalyze’s data showed that $1.11 million worth of short positions liquidated within a four-hour session on January 20.
The inference was that the move south to $0.92 invited a lot of bearish attention. The violent surge upward that followed wiped them out. This also reinforced the strength of the range extremes. A retest of the $0.92-$0.93 levels could thus be used to buy MATIC.