Polygon (MATIC) Faces Strong Bearish Sentiment as Price Drop Continues

• MATIC retested the psychological level of $0.50; however, the associated trading volume remained minimal.
• Expectations are high for a potential decline towards $0.448 or even lower in the upcoming week.
• Similar to many other altcoins, Polygon (MATIC) is currently following a downward trajectory in the crypto market.

Polygon (MATIC) is facing a turbulent period with price drops leading to historical lows, indicating a strong bearish sentiment in the market.

MATIC’s Recent Downtrend and Market Conditions

Polygon (MATIC) has been experiencing a downtrend, similar to major cryptocurrencies like Bitcoin. The recent breakdown beneath its established range has been notably challenging for the bulls. The most recent price drop to $0.44 has imposed significant strain on investors, marking the lowest trading price for MATIC since June 2022. The failure of buyers to maintain previous gains over the past three months underscores the prevailing long-term bearish outlook.

Market Reactions and Short-Term Movements

Following a sharp decline on July 5th, MATIC managed an 18% price rebound within 36 hours, reaching the $0.50 resistance level. However, this bounce lacked substantial trading volume, and bearish activity quickly resumed. On the 12-hour chart, the RSI has persistently remained below the neutral 50 mark since early June, confirming the ongoing bearish trend. Crucial resistance levels at $0.543 and $0.518 offer potential points where short sellers might re-enter the market. The On-Balance Volume (OBV) continues to trend downward, reflecting robust selling pressure since April. This combination of price action and technical indicators suggests a looming downward movement toward $0.44 and possibly $0.393.

Speculative Market Insights and Funding Rates

Data from Coinalyze reveals that on July 5th and 6th, the funding rate of MATIC dropped into negative territory, indicating a dominance of short sellers. Although the funding rate has since turned positive, it fails to demonstrate significant bullish momentum. The Open Interest metric has also declined as MATIC touched the $0.50 resistance, signaling speculators’ reluctance to buy at this level. The spot Cumulative Volume Delta (CVD) has been trending downward this month, following a minor uptick in buying pressure in late June. Collectively, these metrics accentuate the overwhelming strength of sellers and foreshadow potential further price declines.

Conclusion

To summarize, Polygon (MATIC) is grappling with substantial bearish pressure, with critical support levels being retested and potentially broken. Although a brief price bounce occurred, it lacked the volume required to indicate a lasting recovery. Market indicators and trading metrics point toward continued bearish sentiment, suggesting that traders and investors should remain cautious. The near-term forecast for MATIC includes a probable descent to lower support levels around $0.44 and possibly $0.393, representing critical junctures for the crypto asset.