MATIC Backpedals Into Bearish Track Despite Its Social Dominance
The current state of MATIC and Polygon’s crypto ecosystem ranks among the worst. It took a toll on In the wake of FTX’s demise, the industry-wide contagion has impacted other projects, Polygon among them.
Despite this, Polygon is in the top three DeFi companies in terms of revenue. However, Polygon and its native coin is seen to continue to bear the brunt of the pains from the collapse of FTX.
Can MATIC truly rally now, as it falls to its support at $0.82 despite its social dominance?
For MATIC, It’s A Narrow Market
At the moment, MATIC is trading at $0.861, with a fairly narrow green candle. Indicator BB shows a point of maximum pressure at around the same price.
Coupled with the bearish formation of a descending triangle, this spells doom for MATIC over the following days.
Past results show that the token has also had trouble gaining traction. Available data on CoinGecko shows that MATIC is currently experiencing a losing run across all timeframes, with the monthly timeframe being the only exception, posting a gain of 2%.
According to CoinMarketCap’s on-chain research engine, the majority of MATIC holders are now in the red, with over 66% of the coins held in that spot. These are all bearish indications that the situation may deteriorate.
Given that Polygon is an L2 for Ethereum, it is not surprising that MATIC and ETH have strong connections. Currently, the correlation coefficient between the two is 0.75. This indicates that the price movements of the two strongly correlate with one another.
Investors and traders should monitor this signal, as any significant price change in ETH could aid Polygon’s comeback. Overall, though, investors and traders should anticipate MATIC to surpass $0.851
Bulls should seek support at $0.772.
Bearish Breakout Expected
Similar to what was stated previously, MATIC’s strong correlation with ETH can be a significant challenge for support but a significant boost for an uptrend.
Despite Polygon’s social dominance, the loss of market confidence will surely cause the price of MATIC to decline.
A short position at or below the current market price will mitigate the bearish market action. With the Bollinger band indicating a significant MATIC price decline, we can anticipate a bearish breakout in the next days.
As that day approaches, MATIC bulls can only pray for a miracle in order for a recovery to occur.
Related Reading: Litecoin (LTC) Up 8% In Last 24 Hours, The Biggest Gainer Out Of Top 20 Cryptos
MATIC total market cap at $7.5 billion on the weekend chart | Featured image from Daily Hodl, Chart: TradingView.com News Source