Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- MATIC’s pullback hit July lows, clearing all recent gains.
- But buying volumes increased over the weekend.
The bearish sentiment from mid-July still looms in early August. Over this period, Bitcoin’s [BTC] price action has weakened, exposing most altcoins to reverse July gains. In particular, Polygon [MATIC] shed over 25% after prices slumped from $0.89 to around $0.65 (July lows).
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However, MATIC saw renewed interest after retesting the July lows over the weekend (5-6 August). Despite the little spike in MATIC demand, BTC struggled to hold on to $29.0k, and extra losses could expose MATIC bulls to risk.
Will the 38.2% Fib level hold?
Source: MATIC/USDT on TradingView
A Fibonacci retracement tool was placed between the June low and July high. Based on the tool, the 50% Fib level ($0.70) failed to hold the pullback. So far, 38.2% Fib level ($0.655) has been retested twice as support.
At the time of writing, MATIC bounced from the 38.2% Fib level. But the higher timeframe market structure was still bearish. However, with the weak BTC, a price rejection was feasible at the 50% Fib level ($0.70).
Below the 38.2% Fib lies bullish order blocks on the daily and weekly charts. The daily order block has been honored once and could ease further price slump if the 38.2% Fib level support cracks. So, the 38.2% and 23.6% Fib levels are key interest levels for bulls.
The Relative Strength Index and Chaikin Money Flow readings were below crucial thresholds – a negative at the time of writing. It implies weak buying pressure and capital inflows, suggesting the 50% Fib level could act as a roadblock unless BTC front a strong recovery above $29.5k.
More buying volumes over the weekend
Source: CryptoMeter (MATIC Metrics on 6 August)
Despite the negative price chart readings, the overall MATIC’s metrics in the spot market registered a renewed demand over the weekend.
How much are 1,10,100 MATICs worth today?
According to CryptoMeter, the buy volume surpassed the sell volume at the time of writing. But the overall volume dip by over 40% could complicate further advance by bulls.
Nevertheless, the futures market also registered an uptick in demand over the weekend. According to Coinalyze, the Open Interest rates jumped from $122 million to over $127 million as CVD (Cumulative Volume Delta) surged.
Source: Coinalyze
