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Macroeconomic events continue to hit crypto markets hard. Polygon (MATIC), one of the favorite cryptocurrencies, fell to January levels and gave back most of the 2023 gains it made in the first quarter. In addition, there is a possibility that the decline may deepen.
MATIC was trading at $0.8582 at the time of writing, well below the key Q1 2023 support zone of $0.9172 – $0.9498. Similarly, Bitcoin (BTC) was hovering below $27,500 at the time of writing, which could put further downward pressure on its lower timeframe performance.
Will the Bulls Return?
On the 4-hour chart, the RSI was in oversold territory with a value of 24 at the time of writing. When this situation is analyzed, it can be stated that it is an extremely bearish position. However, OBV has had some eventful days in the last two weeks, preventing a strong rebound.
The break of the support zone (cyan) prompted sellers to aggressively push MATIC price below 0.8712. Sellers may continue to force MATIC to retrace back towards the support levels of $0.8140 or $0.7514 if the bearish trend continues in the coming hours/days.
Aside from that, MATIC may try to rally and hold above the support zone, especially if BTC bounces back to the $28,000 level and rallies higher. The rally, however, could stall around the recent high of $4 on May 1.
Monthly Holders in Red
MATIC’s 30-day MVRV (Market Value to Realized Value), which measures the short-term profit/loss of its investors, was -13%. This suggests that MATIC monthly traders are at a loss and the altcoin is undervalued.
In addition, sentiment has also remained negative since mid-April, reflecting the bears’ dominance in the market. In addition, the funding ratio was negative at the time of writing. This further tilted the scale in favor of sellers.
However, if BTC reverses its recent losses and rallies, it could pull MATIC higher alongside it and provide relief to the bulls.
