MATIC Price Analysis: A falling knife-catch scenario

MATIC Price Analysis A falling knife-catch scenario
  • MATIC price coils in a triangular fashion, though the internals hint at a possible smart money trap.
  • Polygon price shows a persistent tapering in volume amidst the consolidative downtrend.
  • Multiple bullish and bearish trade ideas can be utilized through use of this analysis.

MATIC price shows reasons to believe in a decline targeting the mid $0.50 zone.

MATIC price looks like trap

MATIC price has been a crypto outperformer during the summer of 2022. Since the June 18 sell-off, the smart contract alternative token rallied an impressive 195%. MATIC price has since been in a consolidation, falling to at most 27% since the summertime high at $1.04.

MATIC price currency auctions at $0.84 as the bulls and bears wrestle over smaller integer spreads within what appears to be a contracting triangle. According to the Volume Profile, the Polygon network token has been persistently taping in transactions, which is a bullish signal suggesting the uptrend could continue eventually. There is also RSI divergence between the highs and lows within the trading range which under Elliot Wave Theory justifies the triangle pattern.

MATIC USDT 1-Day Chart

However, traders witnessing the pattern should be aware. The Fibonacci Retracement levels between each leg of the triangle do not correlate. There is no one Fib relationship between Wave A at $0.72 and Wave B at 1.04. Additionally, wave C is not an ideal FIB relationship compared to wave B. These are FIB techniques that the novice trader may not be aware of. The construed FIB relationships hint that the displayed triangle could be a Smart Money trap.

Thus this thesis proposes the idea that:

  1. MATIC price is still bullish, with targets back at $1.04 and potentially $1.20. 
  2. Wait for a knife catch scenario. A breach into the $0.60 zone could be an amazing discount if the MATIC price retraces back to $1.00 and $1.20 afterward. 

Invalidation of the bearish thesis targeting $0.839 depends on $1.04 remaining unbreeched.

If the knife does fall, the invalidation for the bullish idea targeting $1.00 and potentially $1.20 will be the June 18 swing low at $0.31.

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Tony Montpeirous
Tony Montpeirous
Tony Monpeirous is a full time crypto trader and chart analyst at Coinmash and FXStreet. His style of trading includes, Elliot Wave, Auction Market Theory, and Classic Price Action techniques. When he is not on the screens, Tony enjoys music, cooking, and learning new skills.