The price of MATIC, the token that powers the leading Layer 2 (L2) platform Polygon, has seen a significant decline of 10% in the past week, trading close to the lower line of the horizontal channel it has been trending within since April 13. This downward movement has raised concerns among investors and traders, as the altcoin risks falling below critical support levels and reaching new lows if bearish sentiment continues to surge.
At the time of writing, MATIC is trading at $0.63, its lowest price since October 2023. The price has been fluctuating within a range, bouncing between resistance at $0.75 and support at $0.64. This pattern typically indicates a consolidation phase where buying and selling pressures are balanced, preventing the price from making strong directional movements.
Recent data shows a spike in bearish sentiment towards MATIC, with the weighted sentiment reaching -0.64, indicating a negative bias in the sentiment surrounding the asset. This negative sentiment has also been reflected in the declining futures open interest, which has decreased by 8% since the beginning of June, suggesting that more traders are closing their positions without opening new ones.
Key momentum indicators, such as the Relative Strength Index (RSI) and Money Flow Index (MFI), show that MATIC is currently oversold, indicating weakened buying pressure. If this trend continues, MATIC could fall below the support level at $0.64 and trade at $0.61. However, if the bulls manage to defend this support level and sentiment towards the altcoin shifts to positive, there is a possibility of a rally towards $0.67 and an upward trend towards the upper line of the horizontal channel.
In conclusion, the recent decline in MATIC’s price has raised concerns among investors, with bearish sentiment surging and the altcoin at risk of breaking below crucial support levels. Traders are closely monitoring key indicators to assess the future price movement of MATIC and determine potential buying and selling opportunities. If the bulls manage to defend the support level, there is a chance for a positive shift in sentiment and a potential rally towards higher price levels.
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