After last week’s strong bearish movement we have experienced a week of indecision in which the “bears” remain cautious because of the proximity to the support zone and the “bulls” are waiting to see signs of weakness in the downtrend before acting. This situation leaves us with a small recovery in the market, which draws a macro scenario very similar to the one we had at the beginning of the week as we can see in the $BTC chart which is approaching the weekly close with a positive result.
This recovery has been most noticeable in the altcoins market, as can be seen in the Bitcoin dominance chart, which is once again leaving new lows below 44% and approaching 42% where the annual uptrend line is located.
This downward movement of the dominance of Bitcoin together with the growing lateralization movement of $BTC leaves us with some tokens that have had a good weekly result, such as $COMP or $ZIL that rise +30% or $MATIC, the token that we are going to analyze on this occasion and is approaching closing with a result of +50%.
$MATIC is the governance token of the Polygon/Matic Network, a network designed to solve the scalability and interoperability problems of the Ethereum network, increasing transaction speed and lowering costs.
From a technical point of view $MATIC has been in a downtrend since December 2021. We can identify a pronounced movement in January, which goes back to the 0.5 Fibonacci retracement to later generate a replica that has led to the March 2021 prices as we can see on the 1d chart.
This image also identifies the growing movement of this week, which has led the price to rise to the area where the 50-day MA is located, close to $0.62.
If we zoom in on the 1h candle chart, we can identify an inverted Shoulder-Head-Shoulders technical figure.
This is a trend reversal figure, but it occurs in a short-term chart. It may be an upward correction within the long-term downtrend.
This figure started to be drawn from June 14, but it was not confirmed until last Wednesday when the price broke the neckline at $0.45.
After this confirmation, the price reached $0.62 and was the technical target of the figure. In this area we find the tertiary trendline and the 50-day moving average, so it can be a resistance area that makes the price pull back.
To consider possible future scenarios let’s look at the 4h chart, which identifies this tertiary trend, the main downtrend and possible support and resistance zones.
As I indicated above, the tertiary trend may act as resistance, although we can highlight $0.68 and $0.75 as possible short-term resistances since it is where the main trendline and the highs after the bearish breakout in May are located.
On the lower side, it is worth highlighting that the neckline zone is at $0.45, which could act as support, giving the possibility of the short-term trend change. Given the global situation of the markets this situation could be reversed at any time if the main downtrend is reactivated.
I would also like to highlight the $0.30 area, where the April 2021 lows are located and which could act as support in the event that we see a new retest to the June lows.
Finally, remember that nothing in our articles can be considered as investment advice, everyone must do their own analysis and develop their own trading strategy. From the Belobaba Crypto Fund team, we only show our analysis and investment tools and how they help us in our operations when making decisions.