MATIC, the native token of the Polygon network, has seen its price decrease by 10% over the past week. This decline has brought the token close to the lower boundary of the horizontal channel it has been following since mid-April. If the trend towards altcoins remains bearish, MATIC could fall below its critical support level, risking new lows.
Why is MATIC Dropping?
As of the latest data, MATIC was trading at $0.63, marking its lowest price since October 2023. The token has been fluctuating within a range between $0.75 resistance and $0.64 support since April 13. This horizontal channel typically forms when an asset’s price consolidates within a specific range, reflecting a balance between buying and selling pressures.
The recent move towards the lower boundary of this channel highlights a growing bearish sentiment for the altcoin, confirmed by negative weighted sentiment data on the blockchain. The sentiment score, at -0.64, indicates a predominance of negative sentiment around MATIC. This bearish outlook is further supported by a decline in open interest in MATIC futures, which fell to $197 million, an 8% drop since early June.
What Does the Chart Indicate?
Open interest in MATIC futures measures the total number of active futures contracts. A decline in open interest suggests that more investors are closing their positions without opening new ones, signaling bearish market behavior.
Technical analysis also shows increasing selling pressure. Key momentum indicators such as the Relative Strength Index (RSI) and Money Flow Index (MFI) read at 36.44 and 26.11, respectively. These values suggest that MATIC is currently oversold, with diminishing buying pressure.
Investment Takeaways
Key takeaways for investors:
- Monitor the $0.64 support level closely; a break below could signal further declines.
- Negative sentiment and declining open interest indicate bearish market conditions.
- RSI and MFI values suggest MATIC is oversold, but caution is advised.
- Consider market trends and broader altcoin sentiment before making investment decisions.
The current state of MATIC reflects significant selling pressures and bearish market sentiments. Investors should remain cautious and watch for potential shifts in both sentiment and technical indicators before making trading decisions.