MATIC has shed 50% from May highs, could more losses be in sight
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
Altcoins that fall by 50% on the charts can fall yet another 50%. Polygon has been on a steady downtrend on the charts since late March and flipped the $1.2 region from demand to a supply zone in May. The number of unique addresses on the MATIC chain has dropped by an astonishing 85%. Whale transactions were also falling.
This showed a network in decline which was reflected on the price charts as well.
Source: MATIC/USDT on TradingView
The downtrend was characterized by a series of lower highs and lower lows on the H12 chart from late March. The mid-March rally saw MATIC climb from the $1.36 lows to the $1.71 highs. At the time, it did break just above a previous lower high, and for a few days, it appeared to signal a bullish market in the making. However, the bulls were unable to defend the $1.58 support level and crashed right through this level early in the month of April.
It was a similar tale in May when the price dropped below the $1.2 demand zone and retested it as resistance. The $1 level did not last long as support either.
The bears are extremely strong on the charts, and even though there are lower timeframe rallies, the downtrend appeared set to continue. The 55-period moving average (green) and the 21-period SMA have both acted as resistance in the past two months. The price would need to rise past the 55 SMA, and also the $0.75 level in order the break the previous lower high.
Source: MATIC/USDT on TradingView
Highlighted in white on the RSI is a series of higher highs, while the price made a series of lower highs on the price chart. This is a hidden bearish divergence in the making
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