Polygon short sellers should take note of this price level
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Polygon was in a higher timeframe downtrend.
- There was a notable liquidity pocket near $0.6 after the sharp rejection last week- will MATIC test it again?
Polygon [MATIC] saw a brief resurgence on the charts on 29 August. Alongside the rest of the crypto market, its short-term outlook flipped bullish for a brief period. But Bitcoin [BTC] gains from the Grayscale victory against the SEC were short-lived.
Read Polygon [MATIC] Price Prediction 2023-24
Bitcoin was trading at $26k again, and many altcoins were unable to defend important short-term support levels. MATIC was one of them. With a bearish bias on the higher timeframe as well, traders can look for selling opportunities.
The MATIC price action showed sellers remained dominant
Source: MATIC/USDT on TradingView
The 4-hour chart showed that the market structure was bearish once more. The higher low formed at $0.578 on 30 August was not defended, and a bearish market structure break occurred on 31 August. Hence, there was a bearish order block at the $0.58 mark, highlighted by the red box.
In the past few days, MATIC prices hovered above the $0.539 mark. The momentum leaned bearish but wasn’t significant, with a reading of 45 on the RSI showing weak downward momentum. To the north, there were two short-term resistance levels (orange dotted) at $0.558 and $0.59 where a rejection could occur.
The OBV saw a slow, minor uptick in September, which supported the idea that MATIC could see a minor bounce. However, such a move might not have the force to break above the $0.59 resistance and flip the H4 market structure bullishly.
Therefore, traders can look to enter short positions near the $0.58 region, with invalidation above $0.59 and targeting the local lows at $0.53.
The rising spot CVD was a beacon of hope
The stagnant price action in September saw the Open Interest hibernate. Speculators were unwilling to enter the market and bet on a significant price move, as MATIC showed no signs of volatility over the weekend.
The funding rates were negative and suggested that traders preferred to go short than long MATIC at this point.
How much are 1, 10, or 100 MATIC worth today?
Yet, despite these factors, the spot CVD has steadily trended higher over the past week. This was a signal of demand in the market as buyers sought to grab hold of some MATIC just above the long-term support at $0.5.
While it was good news for long-term buyers, it might not have much bearing for short-term traders, and prices could still dip toward $0.53 despite the positive CVD.