MATIC Struggles at $0.73, Eyes $0.85 Amid Volatility
In A Nutshell
Polygon (MATIC) is currently facing a crucial resistance level at $0.73, which could significantly impact its ability to reach the $0.85 price target. With a current trading price of $0.68, the token has experienced a 25.56% correction over the last week. Liquidity data suggests a high level of open positions could be liquidated at the $0.73 mark, posing a potential barrier to upward movement. Additionally, the Market Value to Realized Value (MVRV) ratio indicates MATIC could be undervalued, hinting at a possible rebound. Technical analysis reflects a bearish momentum, but signs of recovery could emerge if buying pressure increases.
Liquidity Hurdles and MVRV Insights
Analysis of MATIC’s liquidity positions reveals a significant challenge at the $0.73 price level, where approximately $235,280 in open positions could face liquidation. This zone not only represents a financial hurdle but could also serve as a technical resistance point for the cryptocurrency. The current MVRV ratio of -18.37% suggests that most holders would incur losses if they decided to sell at prevailing market prices, potentially indicating that MATIC is undervalued and poised for a recovery. Historically, similar MVRV levels have led to price rebounds for Polygon, suggesting a potential short-term price increase if the market conditions align.
Technical Analysis and Price Movements
A review of the 4-hour chart for MATIC shows attempts to surpass the $0.73 resistance level, with the most recent attempts on April 13 and 15 being thwarted by bearish forces. Currently, a support level has formed at $0.67, which could prevent further declines. The Relative Strength Index (RSI) indicates bearish momentum, which may limit short-term upward movement. However, MATIC might find a recovery path if it breaches the oversold territory. The Fibonacci retracement levels suggest potential short-term trading ranges between $0.62 and $0.67, with an opportunity for an upward move toward the $0.71 level if momentum shifts.
Our Take
Polygon’s journey towards its $0.85 price target is fraught with challenges, primarily the significant resistance at $0.73. While the MVRV ratio and liquidity data suggest potential for recovery and appreciation, current technical indicators paint a mixed picture. Investors should closely monitor the $0.73 resistance level, as a successful breakout could signal a strong bullish trend towards the $0.85 target. However, the bearish momentum indicated by the RSI suggests a cautious approach. Given the volatile nature of the cryptocurrency market, it’s advisable for investors to prepare for both scenarios – a breakout or further consolidation before a significant upward movement.
References
– Coinglass
– Santiment
– TradingView
