Polygon (MATIC) Breakout May Be in Danger of Being Invalidated

MATIC is the native token used in the Polygon network, a solution for smart contract scaling at a layer-2 level. A technical analysis of MATIC’s price movement on a daily basis shows that on March 29, the price broke out from a resistance line that had previously caused several rejections. This breakout confirmed that the minor support area at $1.08 was reclaimed and that the previous drop below that area (highlighted in red) is now invalid.

However, even with the breakout, the price could not maintain an upward trend and did not reach the 0.5 Fib retracement resistance level at $1.25. This failure makes it possible for the price to drop again.

Nevertheless, MATIC created a high low on April 12 (green icon) and has increased since.

If the price falls below the support area of $1.08, it could catalyze a significant drop toward the next closest support at $0.95. Nevertheless, if there is a rebound, the price of the MATIC token could reach the $1.25 resistance.

The daily RSI is currently above 50 and increasing, which suggests that an upward movement is more likely to happen.

Will Polygon (MATIC) Price Break Down?

The technical analysis from the short-term six-hour time frame aligns better with the possibility of a breakdown. This is because the price trades inside an ascending parallel channel, which is considered a bearish pattern. The channel’s resistance line also coincides with the $1.19 minor resistance area. 

Despite the rejection from the area (red circle), the MATIC price still trades in the upper portion of the channel. This allows for the possibility that it will eventually break out. 

Whether the price breaks out or falls to the channel’s support line will likely determine the future trend’s direction. While a breakout could lead to a high of at least $1.25 and possibly $1.50, a breakdown would likely trigger a fall to $0.94.

To conclude, the Polygon price forecast is still undetermined. Whether the price breaks out from the current pattern or gets rejected could determine the future movement. A breakout could lead to highs of $1.25 or $1.50, while a breakdown could catalyze a fall to $0.94.

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