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Polygon (MATIC) Price Analysis: Will MATIC Bounce Back After Hitting New Yearly Low?

Picture Source: BeInCrypto

In the fast-paced world of cryptocurrency, Polygon (MATIC) has been on a rollercoaster ride, with its price recently hitting a new yearly low on September 11. This decline marked a significant breakdown from the $0.60 horizontal resistance area, raising questions about the future of this digital asset. In this article, we’ll delve into a technical analysis of MATIC’s price movements, explore the potential for a bullish reversal, and discuss the impact of recent developments in the Polygon network.

Polygon Price Falls to New Yearly Low:

The daily timeframe technical analysis for MATIC paints a bearish picture. Since reaching its yearly high of $1.57 on February 28, MATIC has been trapped under a descending resistance line. The price action validated this trend when it broke below the $0.60 horizontal support area on August 29, effectively transforming it into a resistance zone.

The rejection coincided with a touch of the descending resistance line, pushing MATIC to a new yearly low of $0.51 on September 10. Over a period of 208 days, the price has plummeted by 67%, raising concerns among investors. If the current downward trend persists, the next significant support level to watch is at $0.34, marking a further decrease of 33% from the current price.

On the flip side, the closest resistance sits at $0.84, offering a potential 63% increase from the current price. While the price action appears overwhelmingly bearish, there are glimmers of hope in the form of the daily Relative Strength Index (RSI).

RSI Signals Potential Bullish Reversal:

The RSI serves as a momentum indicator in the crypto market, helping traders identify overbought or oversold conditions. It also provides insight into whether it’s time to accumulate or sell an asset. Generally, readings above 50 and an upward trend suggest an advantage for the bulls, while readings below 50 indicate the opposite.

Although MATIC’s RSI remains below 50, it has shown promising signs by increasing and forming a higher low. Additionally, it has generated a bullish divergence, a positive development where increasing momentum accompanies a declining price. Such divergences often precede bullish trend reversals, offering a glimmer of hope for MATIC’s price recovery.

Positive Developments in the Polygon Network:

Amidst the price turbulence, there’s a glimmer of hope for Polygon in recent network developments. The integration of a crypto wallet based on the Polygon blockchain by Southeast Asian application Grab has injected positivity into the MATIC ecosystem. Such partnerships and integrations can potentially enhance the utility and adoption of the Polygon network, which may influence MATIC’s price in the long run.

MATIC Price Prediction:

Elliott Wave Count Predicts Bottom: Technical analysts often turn to the Elliott Wave theory to gauge price trends and investor sentiment. Examining long-term price patterns and psychology, this theory can offer insights into MATIC’s future direction.

Currently, MATIC seems to be in the fifth and final phase of its downtrend that commenced in February. The structure of the fourth wave strongly supports this interpretation, as it unfolded within an ascending parallel channel—a common feature in corrective movements. Furthermore, the peak of wave four briefly exceeded the $0.80 horizontal level, which has now turned into a resistance level.

If the downtrend persists, MATIC’s price may complete its fifth and final wave around $0.41, aligning with wave four’s 1.27 external Fibonacci retracement level. This target remains above the primary horizontal support zone at $0.34. Therefore, the most plausible MATIC price prediction involves a decline to around $0.40, potentially followed by a significant rebound.

However, if MATIC manages to reclaim the $0.60 level, it could signal a bottom has been reached, potentially paving the way for a 63% price increase towards the next resistance at $0.84.

Read More: Ethereum Founder Expresses Concerns Over Hong Kong’s Crypto Enthusiasm

Conclusion:

The journey for Polygon (MATIC) has been tumultuous in recent times, with the price hitting new yearly lows. While the technical analysis suggests the possibility of further declines, the RSI hints at potential bullish momentum. Additionally, positive developments within the Polygon network could provide the necessary support for a price recovery. As the cryptocurrency market remains highly volatile, investors should exercise caution and closely monitor MATIC’s price movements in the coming days and weeks.

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