Can Polygon (MATIC) Break $0.50 Despite Market Downturn?

Polygon (MATIC) recently fell below the $0.50 support level, which is now acting as immediate resistance. Currently trading at $0.41, MATIC is under bearish pressure as market sentiment remains weak.

On August 6, 2024, Coinglass data revealed a significant increase in MATIC liquidations, with short positions at $371.67K compared to long positions of $89.07K. This imbalance indicates that traders are expecting further declines in MATIC’s price.

Polygon (MATIC) Shows Signs of Recovery Despite Market Challenges

Net flow data indicates that over 13 million MATIC tokens have been sold off, with outflows exceeding inflows as traders respond to falling prices. Despite this trend, Polygon (MATIC) has experienced a 12.34% price increase since August 5, rebounding from a significant market crash caused by yen carry trade volatility.

MATIC whale transactions count. Source: Santiment

Polygon appears to have potential for recovery, evidenced by a rise in whale transactions that points to increasing interest from large investors. The MVRV Long/Short Difference is at -27.48%, suggesting many holders are still at a loss, which could reduce immediate selling pressure. With the price climbing to $0.812 and heightened whale activity, there is a positive outlook for Polygon’s future.

Polygon (MATIC) Faces Resistance and Support Levels Amidst Bearish Pressure

As of August 6, 2024, Polygon (MATIC) is trading at $0.3989, marking a 3.77% increase for the day. Despite this uptick, the price remains under pressure from a descending trendline, reflecting ongoing bearish sentiment.

MATIC/USD 1-day price chart. Source: TradingView

Key resistance levels are highlighted by the Fibonacci retracement levels. MATIC faces significant hurdles at $0.4814 (61.8% Fibonacci retracement) and $0.5206 (78.6% Fibonacci retracement). A successful breakout above these levels could see the price testing the psychological $0.70 mark.

The Relative Strength Index (RSI) is at 37.28, indicating that MATIC is nearing oversold territory. This could suggest a potential reversal if buying pressure increases. Meanwhile, the Moving Average Convergence Divergence (MACD) shows a bearish crossover, with the MACD line below the signal line.

Support is crucial at $0.327. A decline below this level could lead to further drops, potentially reaching the $0.20 mark. Resistance remains strong at the trendline and within the $0.48 to $0.52 range.

Polygon (MATIC) Thrives in Network Growth Despite Price Drops

In July 2024, Polygon (MATIC) stood as the fourth-largest Ethereum scaling solution by total value locked (TVL), with $709 million. This places it behind Arbitrum, Base, and Blast, but ahead of Optimism. The network’s proof-of-stake (PoS) chain processed over 4.1 billion transactions in Q2 2024.

Polygon’s average transaction fee was $0.01, reflecting a significant 41% decrease from the previous quarter. This is notably lower compared to Optimism’s Bedrock average fee of $0.06.

Source: X

Despite facing recent price challenges, Polygon’s network activity remains robust. Daily active addresses on its PoS chain rose by 47% quarter-over-quarter, reaching 1.2 million. Additionally, the network handled 452 million DeFi transactions over the past year, valued at $1.5 billion, surpassing competitors like Arbitrum, Base, and Optimism.

Polygon Total Value Locked. Source: Messari report

Polygon’s Polymarket platform also saw notable growth, with its TVL increasing by 237% quarter-over-quarter. This surge was driven by heightened betting activity in anticipation of the U.S. Presidential elections, highlighting Polygon’s significant role in decentralized finance.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

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