Cryptocurrency

Polygon [MATIC]: How short sellers can take advantage of this opportunity

Disclaimer: The findings of the next evaluation are the only real opinions of the author and shouldn’t be thought of funding recommendation.

MATIC’s latest streak of bearish engulfing candlesticks has considerably impaired shopping for efforts because the alt jumped beneath its three-month trendline resistance.

While the present construction tilted in favor of sellers, there are a couple of caveats to be cautious of. The present promoting pull outdoors the bearish pennant may lead MATIC into an undesired spiral of losses within the close to time period. At the very least, it has delayed the bullish comeback alternatives.

At press time, MATIC traded at $0.599, down by 4.65% within the final 24 hours.

MATIC Daily Chart 

Source: TradingView, MATIC/USDT

From a rationally conservative lens, the latest fall beneath the three-month trendline (yellow, dashed) may worsen the promoting vigor. Furthermore, this fall chalked out a bearish pennant on the Daily and on shorter timeframes. 

After hovering on the Point of Control (POC, crimson) stage for over per week, the 23.6% Fibonacci resistance rejected greater costs. Thus, MATIC witnessed a down breakout from its bearish pennant.

Should the present candlestick shut beneath the $0.59, the alt would lose its 13-month assist solely to substantiate an additional draw back. In this case, potential shorting targets will relaxation within the $0.427-$0.5 vary. The declining buying and selling volumes through the pennant oscillation have additional fueled the chance of an prolonged downfall. 

Having stated that, an evaluation of the space between 20 EMA (crimson) and the 200 EMA (inexperienced) urged a revival might be due. The final time these EMAs noticed such a spot was in May final yr. Should the sellers dwindle, MATIC may see a compression part within the $0.5-zone. 

Rationale

Polygon MATIC How short sellers can take advantage of this

Source: TradingView, MATIC/USDT

The RSI noticed a revival from the oversold mark on its peaks and troughs over the previous few days. After a bearish divergence with the worth, it noticed a rising wedge breakdown. To virtually improve the probabilities of benefiting from a short, the index wanted to shut beneath its 31-baseline.

The DMI traces blended nicely with a bearish viewpoint because the -DI nonetheless seemed north. However, the CMF’s greater troughs have saved alive the likelihood of a bullish divergence with worth. In this case, the probabilities of a decent part would heighten.

Conclusion

Primarily, the bearish pennant setup rejected by the 23.6% stage, trendline resistance, and the POC may trigger an prolonged breakdown. However, the hole between 20/200 EMA alongside a possible CMF divergence can work in favor of bulls.

Hence, for short calls, the sellers ought to await a detailed beneath the $0.55-$0.59. The take revenue ranges would stay the identical as urged above. 

Moreover, the buyers/merchants should preserve a detailed eye on Bitcoin’s motion as MATIC shares a staggering 97% 30-day correlation with the king coin.

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