January 25, 2023

disclaimer: The findings of the following analysis are the writer’s sole opinion and should not be taken as investment advice

  • MATIC has seen extreme volatility over the past month
  • It had bullish momentum even on the higher timeframes and a move towards $1 was likely

MATIC has made good gains after falling to $0.77 on Nov. 21. During this time, Bitcoin also rose slightly from $15.6k to $17k. While MATIC had a bullish market structure, further gains could depend on Bitcoin’s mood.

Read MATIC’s price forecast 2023-24

If Bitcoin can break past the $17.6k resistance, it could drag the altcoin market upwards. Meanwhile, a move below $16.6k could cause MATIC to dip below $0.89. On shorter time frames, MATIC presented a buying opportunity as it approached the lows.

Short-term consolidation could mean a test of the mid-range and an upward move towards $1

MATIC had a tough time in November, but some consolidation was underway

Source: MATIC/USDT on TradingView

In September, MATIC registered a bullish order block in the $0.73 region. This area, highlighted in cyan, has served as a good demand zone for the past few months. However, on the higher time frames, MATIC was still stuck in a range (yellow) of $0.725 to $1.03.

This range was violently broken in early November when MATIC pumped up as much as $1.26. Just a few days later, the price plummeted as fear gripped the market. Due to the collapse of FTX, MATIC posted losses of almost 40% from $1.26 to $0.77.

Immediately after, the price bounced to $1.12 before falling back to $0.77. This volatility was great for shorter duration traders, but also posed significant risk.

Since November 30, Polygon’s native token has seen reduced volatility. It has been trading between the $0.899 and $0.945 levels for the past week, in a lower time frame marked in blue.

The RSI was just above the neutral 50, showing no strong momentum in either direction, while the OBV has also been relatively flat in recent weeks. There was no strong trend going on, although the daily market structure was bullish. Meanwhile, the Bollinger bands width indicator fell sharply to indicate reduced volatility.

MVRV was back in negative territory after aggressive profit taking in November

MATIC had a tough time in November, but some consolidation was underway

Source: Sentiment

The MVRV ratio (365 days) briefly surfaced in early November, but was knocked down again. This showed significant profit taking last month. At the time of writing, the MVRV was seeing another sharp slump.

Meanwhile, development activity continued well. This showed long-term investors that developers were going about their business without considering the price action, which was an encouraging finding.

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