Bull Trap Puts MATIC Price At 15% Downside Risk; Keep Holding?

On February 15th, the MATIC coin price gave a strong breakout from the $1.3 neckline resistance of a rounding bottom pattern. The completion of this three-month-long pattern was supposed to accelerate the buying pressure and lead a direction uptrend. However, amid the ongoing uncertainty in the crypto market, the MATIC reversed from the $1.526 peak and plunged below the $1.3 support, showcasing failed breakout attempts or a bull trap.

Key Points 

• A V-top reversal in MATIC price indicates strong sellers’ confidence to tumble the prices lower
• The 50-day EMA moving near $1.178 and 100-day EMA at $1.06 increases the support strength of these levels
• The intraday trading volume in the MATIC  is $735.2 Million, indicating a 37.5% gain.

Source- -Tradingview

The last two weeks’ price action in MATIC price shows a V-top rejection from the $1.52 resistance levels. This type of rejection is characterized by an inverted V structure showcasing a rapid downfall in an asset’s price.

During this downfall, the polygon coin price lost 17.5% in market value and broke below the $1.3 support On February 24. A substantial loss on the aforementioned date could be associated with the release of the Personal Consumption Expenditures (PCE) price index showing higher than the expected value. As a result of this data, the US Fed is more likely to tighten its interest rate hike program, putting market sentiment under bearish turmoil.

Also Read: Bitcoin ($BTC) Quickly Losing Support Range; Price At $21K Next?

Thus, the $1.3 breakdown undermines the prior breakout and increases the possibility of further losses. If the altcoin sustains below the breached support, the sellers may drive the prices to $1.178( near the 0.5 Fibonacci retracement level), followed by $1.06(0.618 FIB level).

Any further breakdown will question the credibility of the overall bullish trend.

Technical Indicators

RSI: The daily RSI slope breakdown below the midline indicates the bullish sentiment fading away.

EMAs: The recent downfall breached the 20-day EMA slope which offered dynamic support during the last recovery cycle. This breakdown gives sellers an additional edge to put MATIC on a longer correction.

MATIC Coin Price Intraday Levels

• Spot rate: $1.26
• Trend: Bearish
• Volatility: Low
• Resistance levels- $1.3, and $1.52 
• Support levels- $1.17 and $1.06

The post Bull Trap Puts MATIC Price At 15% Downside Risk; Keep Holding? appeared first on CoinGape.