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- MATIC cleared over three-quarters of its rally gains in mid-February.
- A bullish divergence between open interest rates and price action may give the bulls hope.
Polygon (MATIC) gave away more than three-quarters of the profits from the mid-February rally. It faced a critical test when it fell to its multi-week ascending trend line. While the recent price rejection of $1.55 resulted in a 20% depreciation, there was still hope for bulls if Bitcoin (BTC) held the psychological $23,000 mark.
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Can an ascending line check a decrease?
Source: MATIC/USDT on TradingView
After a rally in mid-February, when the MATIC rose 34% from $1.1611 to $1.5567, a subsequent correction saw the MATIC fall 20%, erasing more than three-quarters of its previous gains.
The Relative Strength Index (RSI) fell below 50, indicating a bearish structure. If it crosses below the ascending line, the momentum could turn bearish as well. Moreover, Chaikin Money Flow (CMF) headed south and crossed the zero line, reinforcing bearish leverage in the market.
As a result, bears may continue to devalue the MATIC below the uptrend line. Short sellers can take advantage of additional short selling opportunities at the 100-period exponential moving average (EMA) of $1.1796. The 200-period EMA of $1.0640 could call for an extended decline.
Alternatively, long-term bulls may aim for $1.3534 or the upper resistance zone above $1.5, but this move can only be made if the ascending line stops the decline.
To read Polygon (MATIC) Price Forecast. 2023-24
Open interest declined but showed signs of a turnaround at press time
source: Coinglass
Nevertheless, the OI increased at press time, creating a divergence with the price, which could indicate a potential price reversal. This development may give the bulls hope for stable ground at the ascending $1.25 line level. However, the bulls must wait for a retest on the ascending line and confirmation of the uptrend before going long.
All in all, the fate of the MATIC hangs in the balance as it falls into a multi-week ascending trend line. While bulls may find hope in a bullish divergence between open interest rates and price action, bears still have the upper hand, with the RSI and CMF pointing to a bearish market structure.
