Altcoins

Polygon [MATIC]: How short sellers can take advantage of this opportunity

Disclaimer: The findings of the next evaluation are the only opinions of the author and shouldn’t be thought-about funding recommendation.

MATIC’s current streak of bearish engulfing candlesticks has considerably impaired shopping for efforts because the alt jumped under its three-month trendline resistance.

Whereas the present construction tilted in favor of sellers, there are a number of caveats to be cautious of. The present promoting pull outdoors the bearish pennant could lead on MATIC into an undesired spiral of losses within the close to time period. On the very least, it has delayed the bullish comeback alternatives.

At press time, MATIC traded at $0.599, down by 4.65% within the final 24 hours.

MATIC Day by day Chart 

MATICUSDT 2022 05 26 18 35 59

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Supply: TradingView, MATIC/USDT

From a rationally conservative lens, the current fall under the three-month trendline (yellow, dashed) might irritate the promoting vigor. Moreover, this fall chalked out a bearish pennant on the Day by day and on shorter timeframes. 

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After hovering on the Level of Management (POC, purple) stage for over every week, the 23.6% Fibonacci resistance rejected larger costs. Thus, MATIC witnessed a down breakout from its bearish pennant.

Ought to the present candlestick shut under the $0.59, the alt would lose its 13-month assist solely to substantiate an extra draw back. On this case, potential shorting targets will relaxation within the $0.427-$0.5 vary. The declining buying and selling volumes in the course of the pennant oscillation have additional fueled the chance of an prolonged downfall. 

Having mentioned that, an evaluation of the space between 20 EMA (purple) and the 200 EMA (inexperienced) prompt a revival could possibly be due. The final time these EMAs noticed such a niche was in Might final 12 months. Ought to the sellers dwindle, MATIC might see a compression part within the $0.5-zone. 

Rationale

Capture 59 scaled

Supply: TradingView, MATIC/USDT

The RSI noticed a revival from the oversold mark on its peaks and troughs over the previous couple of days. After a bearish divergence with the value, it noticed a rising wedge breakdown. To virtually improve the probabilities of cashing in on a brief, the index wanted to shut under its 31-baseline.

The DMI traces blended properly with a bearish viewpoint because the -DI nonetheless regarded north. Nevertheless, the CMF’s larger troughs have stored alive the potential for a bullish divergence with worth. On this case, the probabilities of a decent part would heighten.

Conclusion

Primarily, the bearish pennant setup rejected by the 23.6% stage, trendline resistance, and the POC might trigger an prolonged breakdown. Nevertheless, the hole between 20/200 EMA alongside a possible CMF divergence can work in favor of bulls.

Therefore, for brief calls, the sellers ought to await an in depth under the $0.55-$0.59. The take revenue ranges would stay the identical as prompt above. 

Furthermore, the traders/merchants should maintain an in depth eye on Bitcoin’s motion as MATIC shares a staggering 97% 30-day correlation with the king coin.

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