- MATIC price has retraced nearly 21% since hitting an all-time high at $0.947 on April 30.
- This pullback could evolve into a steep correction if the 200% Fibonacci extension level at $0.734 gives in.
- The demand zone ranging from $0.557 to $0.483 will be the sellers’ next area of interest.
MATIC price shows that investors are booking profit, which has resulted in a steep correction. Although a higher low hasn’t formed yet, the evolution of a lower low threatens a much steeper pullback for Polygon.
MATIC price faces decisive moment
On the 12-hour chart, MATIC price is beginning to retrace after setting up two higher highs. The current sell-off seems to be due to investors booking profits after Polygon witnessed a 174% bull rally in under a week.
The 200% and 161.8% Fibonacci extension levels at $0.734 and $0.617 could serve as support barriers. However, a breakdown of $0.734 would create a lower low, signaling the start of a retracement.
Although unlikely, if this profit-booking phenomenon snowballs, the demand zone extending from $0.557 to $0.483 will be the last line of defense for MATIC price. A dip into this area will allow investors whose orders weren’t filed during the first leg to ride the next wave.
Hence, investors should keep an eye for a roughly 26% retracement before Polygon price begins to rally to set up new highs at $0.971, coinciding with the 261.8% Fibonacci extension level.
MATIC/USDT 12-hour chart
Adding credence to this 26% correction is IntoTheBlock’s Global In/Out of the Money (GIOM) model, which shows a minor support level between the current price and significant support at $0.472. Here roughly 4,500 addresses previously purchased nearly 2.4 billion MATC tokens.
MATIC GIOM chart
The corrective scenario mentioned above is not bearish since it gives buyers a chance to recuperate. However, if the demand barrier at $0.467 is breached, it will invalidate the bullish scenario and kickstart a 20% downswing to $0.372.
Share
