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Polygon’s MATIC price at risk of further downside despite recent rebound

Analytics

www.fxstreet.com 20 June 2022 11:52, UTC
  
Reading time: ~2 m

  • Polygon price is set to drop below Saturday’s low.
  • Expect to see MATIC tank further until it nears a target turnaround point.
  • Price action still needs to be treated with care as the current environment is far from normal.

Polygon (MATIC) price is set to fall to a historically important low projected at $0.269. In the aftermath of the seismic shock which sent Bitcoin tanking massively over the weekend, MATIC price could be next to suffer from the spillover effect. Buying the dip must be done cautiously, with clear stop losses and good trade management, or otherwise, the position will be at risk of getting burned.

MATIC price should carry a ‘handle with care’ badge

Polygon price remained relatively calm and, all in all, quite good order over the weekend, when cryptocurrencies got rattled by the falling knife that was Bitcoin price as it took out some significant historic hurdles. Despite cash being pulled out of the major cryptocurrency, alt-currencies remained reasonably stable, nevertheless, in spite of the calm, some cryptocurrencies are bleeding and seeing investors pulling out their cash.

MATIC price is thus still at risk of dropping another 27% from where it currently trades, at the monthly S1 pivot level near $0.367, towards $0.269. With cash flowing out of MATIC, the so far well-underpinned price action could start to wobble, see screws loosen and then tumble. Buying the dip needs to be done with solid trade management, where an apparent stop loss is defined, with a risk-reward of at least a 1-to-2 – preferably a 1-to-3 risk-to-reward ratio.

MATIC/USD daily chart

MATIC/USD daily chart

There will, of course, be some buying of Bitcoin price action, and a rebound rally back above $20,000 could spark some broader buying among all cryptocurrencies. That could see price action perform some knee-jerk reactions and quickly rally towards the first available ceiling. For MATIC price that would mean roughly $0.545. A bounce off the monthly S1 support will likely aid the recovery, as will the Relative Strength Index ricocheting from the ‘oversold’ level. All in all, said rally could book a quick 53% return for traders. 


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