- MATIC is approaching $0.70, but the technical setup indicates that a recovery is unlikely.
- According to the RSI and Volume index, the recovery to $1.6 may take longer.
- A break below $0.60 would cause MATIC to fall, bringing levels around $0.28 into play.
On May 30, the cryptocurrency market saw a much-needed rebound, with MATIC rising above $0.60. The Polygon Network’s native token gained 5% in the last 24 hours, indicating that the recovery was continuing. Is MATIC on its way back to health, or is this just another “relief rally”?
MATIC Recovers from a Major Setback
MATIC’s rebound on Monday was not unexpected. If the altcoin rises over $0.981 it will become a new support. For this to occur, the bulls must close their daily candlesticks above the psychological $0.7 level.
If they succeed, MATIC may be able to break through the psychological resistance of $0.9. If the price rises over there, it may target the $0.98 level, which is supported by the 50-day Simple Moving Average (SMA). The Bears might put up a good fight here if they profit from the rallies.
MATIC must clear the 50 SMA obstacle for a definitive bullish breakout, which might push it over the $1 psychological milestone and towards the 100-day SMA at $1.25. MATIC might increase as far as $1.50, or perhaps higher, approaching the 200-day SMA, which is now at $1.6. Before any drop, MATIC’s upside potential could be stopped at this level.
While the MATIC rebound was welcome, traders should be wary of losing sight of the bigger picture. The Relative Strength Index (RSI) had lost its rising trend, and its current reading of 41 indicated that the market was still bearish. Furthermore, the declining volume indicated decreased trading activity, depriving the token of the motivation to make a quick recovery.
These two signs show that what is currently taking place is merely a relief rally, and that unless otherwise proven, there is a risk of one more leg downhill. As a result, if the daily candlestick closes below $0.60, MATIC will drop first to the May 12 swing low of $0.476 before tagging the $0.286 support floor.
Disclaimer: The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry.