Short sellers of MATIC by Polygon should heed these levels

In terms of collaborations and development, Polygon [MATIC] saw phenomenal growth in 2022. However, the 2022 FTX collapse and Terra Luna both had two detrimental effects on the blockchain.

As of the time of publication, MATIC was trading at $0.8416 following several price reversals that crossed new support levels. However, MATIC’s long-term forecast may present a compelling image.

Will MATIC become locked in this range while the long-term EMA moves in an oblique direction?

The short-term Exponential Moving Average (EMA) served as an example of this (blue line).

The 200-day EMA (orange) in particular served as resistance throughout that time.

The 200-day EMA was moving sideways at the time of publication, while the 50-day EMA was in a decline. This suggested that MATIC may temporarily test and breach fresh support levels. In the long run, though (a few days or weeks), it may return to range trading.

The aforementioned trend was corroborated by the On-Balance Volume (OBV). It hit many lows, which showed a drop in purchasing pressure and volume. Additionally, it was seen that the Relative Strength Index (RSI) was oscillating below the neutral 50 level. This demonstrated that the bulls were waning in power without completely ceding control of the market to the bears.

Thus, MATIC may move to a range between $0.7739 and $0.9422 depending on how bullish and bearish the market is. The aforementioned bias would be rendered invalid, though, by an intraday close above the 23.6% Fib level.

From early November through October, MATIC’s open interest increased steadily. But it has been steadily declining ever since. This painted a gloomy picture and showed a decline in capital entering the derivatives market.

Since Q3, development activity has increased, but the negative attitude has not changed.

Despite a steady rise in development activity since Q3, the data revealed a negative sentiment. Therefore, the negative sentiment may hinder further price recovery.

What will MATIC do next?

The price performance of MATIC was not solely determined by metrics. After BTC lost $16.20K, it lost its $0.82 value, demonstrating BTC’s influence on the altcoin.

The two EMAs were significant resistances, and neither the low sentiment nor the declining OI were consistent with this tendency.

Yes, it is likely in the near future with new supports of $0.7739 and $0.7153. However, MATIC may trend sideways over the long term. A better price direction may be determined by monitoring general sentiment and BTC’s performance.