The journey of Polygon (MATIC) has hit a snag as it grapples with a descending resistance trend line that has held strong for a whopping 750 days. Ever since reaching its all-time high of $2.90 in December 2021, MATIC has been on a roller coaster, plunging to $0.32 in June 2022 before showing signs of recovery.
Bearish Candlestick Emerges
Despite the upward momentum, MATIC has repeatedly failed to break free from the clutches of the descending resistance trend line. Recent attempts in November and December 2023 resulted in rejection, with a particularly discouraging breakout failure just two weeks ago, marked by a bearish engulfing candlestick. Now, MATIC finds itself trading below the resilient trend line that has dictated its course for the past 750 days.
Even in the face of these setbacks, there’s a glimmer of hope as the Relative Strength Index (RSI) suggests bullish tendencies. The RSI, a trusty tool for traders gauging market conditions, currently sits above 50, indicating an upward trend and signaling that the bulls still hold sway. A hidden bullish divergence in the RSI adds to the optimism, hinting at a potential continuation of the trend.
MATIC Price Forecast: Sustaining the Bounce
Zooming in on the daily time frame, the outlook remains ambiguous, leaving traders with two possible scenarios. According to the Elliott Wave theory, MATIC may have completed an A-B-C corrective structure, confined within an ascending parallel channel. If this holds true, the bounce on January 8 marked the end of the drop, paving the way for the fifth wave and a potential 40% surge to the channel’s resistance trend line at $1.18.
On the flip side, the bearish count suggests that the five-wave upward movement is now complete, with wave four taking the form of a symmetrical triangle. This scenario predicts a correction’s C wave, leading to a 22% regression to the closest support at $0.65.
Polygon’s co-founder, Sandeep Nailwal, injects a dose of optimism, stating that the release of Matic 2.0 and POL token this year will propel the existing infrastructure forward, with the POL token offering a restaking mechanism and designed to be a multi-chain token.
As the dust settles, whether MATIC breaks out or down from the channel will dictate its fate, with a potential 40% surge or a 22% dip hanging in the balance. In this crypto dance, the market’s twists and turns keep traders on their toes, and the future of MATIC remains uncertain.