Disclaimer: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.
- Market structure turned bearish for MATIC and volatility was high
- Despite the high volatility and against the market trend, a high-risk, high-reward buying opportunity may soon arise.
MATIC surged from $0.88 to $1.26 in a week in early November, representing gains of almost 50%. Four days after the peak of this rally, MATIC fell to $0.76, down 41%. Can longer term traders profitably trade this kind of volatility?
Read polygons [MATIC] Price Prediction 2023-24
Short-term traders are likely to be jubilant due to the recent sharp price moves. With Bitcoin falling below the $16.2000 support, it appeared that the broader market could see another leg down. In this context, MATIC offered a buying opportunity. Will buyers be able to hold their own in the coming weeks?
Range low and bull order block once again as bulls and bears clash near $0.79
MATIC has been trading in a (yellow) range of $1.03 to $0.72 since mid-July. The strong early breakout quickly reversed two weeks ago. At that time, the technical indicators were tilting in favor of the bulls. The Relative Strength Index (RSI) moved into overbought territory, while the Chaikin Money Flow (CMF) and Accumulation/Distribution (A/D) indicators also edged higher. However, this all took a bearish turn over the past few days. CMF and A/D declined, while RSI retested neutral 50 as resistance to show downward momentum.
On September 21, the daily trading session formed a bullish order. It was close to a significant level at $0.74, and the price action at the end of September showed a bullish development in the market structure. This command block was highlighted in cyan and it has been tested twice since then. Both times saw a strong bullish reaction. Can the bulls deliver another performance like this, or will they ultimately succumb?
Revisiting the $0.74 to $0.76 region will likely provide a buying opportunity. Invalidation would be a daily session close to $0.68 with targets at $0.88 and $1.03 to take profit. However, the Bollinger bands were wide. While a visit to the lower band at $0.69 can be bought in hopes of mean reversion, buyers should be cautious, especially given Bitcoin’s weakness on the charts.
Development activity on the rise over the past year, and network growth is also seeing a huge boost
In November, the network growth measure and development activity both reached their highest points of the past year. These are metrics that long-term investors pay some attention to, hence a long-term bullish case for MATIC.
The 365-day market value to realized value (MVRV) has seen an increase since May, but was not yet in positive territory. It briefly broke through the 0 mark on November 7, but the ensuing selling pressure once again put longer-term holders into a loss.