Polygon (MATIC) has started to stabilise after a series of bearish streaks over the last few weeks. The coin has also fallen sharply from its 2022 highs and is now trading well below its three-month trend line resistance. Here are some other facts:
The current set-up is heavily favourable for short-sellers since MATIC has very limited upside
The coin will likely fall below $0.5 even though it consolidated above this process
MATIC will eventually bottom at $0.4 or thereabout
Data Source: TradingView
MATIC: The Short selling play
After periods of bearish sentiment around MATIC, the coin managed to establish a consolidation period after overcoming the $0.5 resistance. There were some hopes that this consolidation could trigger a decisive bullish break. However, as the broader crypto market slows, it doesn’t seem like there is enough momentum to push MATIC further.
Instead, the coin will likely experience some sharp fall. We expect the alt to first of all lose the $0.5 support before the start of trading next week. Once this happens, there will be further downside. MATIC will probably bottom at $0.4 before the bears ease a bit. This will represent a fall of around 35% from the current price.
So, with this set-up, there is no doubt short-sellers could have a field day. The most ideal entry price for a short trade will be $0.6. However, you can still enter after MATIC loses The $0.5 and ride the downward wave towards $0.4.
Where does MATIC go from here?
The weakness that we have seen in MATIC over the last few weeks was expected. But this has got nothing to do with the project and its future. It’s simply a reflection of overall sentiment in the market.
We don’t think there is any sign that sentiment is about to improve. As such, MATIC will likely remain suppressed below $0.5 for at least another month.