The MATIC price recovered well from the crypto meltdown on Wednesday only to drop 40% yesterday. Today it’s up 3% and trying once again to bounce back.
Things were looking good for MATIC at the start of the week. The token, which powers the Polygon network, traded to its all-time high of $2.7023 on Tuesday.
Wednesday’s reversal of fortunes sent the price hurtling lower, eventually finding a floor at $1.0650. The mass liquidation had wiped -60% from the price and shaved $10 billion from its market cap.
The sell-off attracted dip-buying later in the day as some semblance of calm returned to the market. The MATIC price soon found itself back above $2.00, rallying +110% to $2.2450.
The bounce was short-lived, and the second round liquidation sent the token -45% lower to $1.2000.
The MATIC price now attempts to pare yesterday’s losses. So far, it is +26% higher from the low, trading at $1.5156.
A rising trend line, in place from late April, had supported the bull run in May. The 4-hour chart shows the price had bounced from the trend three times prior to last week.
During Wednesday’s bloodbath, the MATIC price touched the trend line for the fourth time. This supportive line was the catalyst for the rally that followed. Therefore, this should now be viewed as a major support level.
Yesterday’s selling took the price to within a whisker of the trend line. The low at $1.1986 was just 4% above the line, which is now $1.1355.
I would class this as the fifth touch, and if history repeats, the price should continue higher. An obvious target on the upside would be $2.2450, where the rally stalled on Thursday.
As long as the price stays above the supporting trend, I would consider Wednesday’s decline to a correction in part of a longer-term bull market.
A break below the trend would reverse the bullish outlook and may lead to further losses.
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