MATIC Shows Many Signs of Local Bottom

    Polygon (MATIC) has bounced off the critical horizontal support level at $0.74 and is breaking above a short-term descending resistance line.

    Daily potential

    MATIC has been dropping underneath a descending resistance line since hitting an all-time high of $2.72 in December. The downward movement led to a low of $0.316 on June 18.

    Since then, the price has started to show upward signs, partly due to the bullish divergence of the daily RSI (green line). On July 7, it broke out above the descending resistance line.

    It then continued to hit a high of $0.79. This movement also caused the daily RSI to move above the 50 level. An uptrend is likely to happen.

    If the upside continues, the nearest resistance level will be at $1.32.

    MATIC/USDT daily chart by TradingView

    Short-term movement

    Looking at the six-hour chart, we can see the bullish outlook more clearly. MATIC has bounced at the $0.74 horizontal support area (green icon), then broke above the short-term descending resistance line, and is now attempting to validate it as support.

    Furthermore, the six-hour RSI has also broken above the descending resistance line and crossed the 50, thus supporting the continuation of the uptrend movement.

    MATIC/USDT 6-hour chart by TradingView

    Wave count

    Trader @CryptoCapo_ tweeted a MATIC chart, indicating that price is completing wave four of a five-wave bearish impulse.

    Source: Twitter

    Though the price seems to be within wave 4 of this impulse, a break above the descending resistance line makes this unlikely. So, it makes more sense if the decline is an A-B-C corrective structure (black), where the A:C wave is 1:1.

    MATIC/USDT daily chart by TradingView

    In the short-term, it is possible that MATIC has started a 5-wave rally since June 18 and has just completed a pullback containing wave 4. The most likely target for the top of the fifth wave is from $1.13 to $1.14. The target is found using the 1.61 external Fib retracement level on wave four and the 0.618 lengths of waves one and three (white).

    Once the target is achieved, a correction is foreseen.

    MATIC/USDT 4-hour chart by TradingView

    (Reference: beincrypto)

    Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. 

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