The crypto market recovered at the beginning of the week but declined before the release of July US CPI (Consumer Price Index) data on Thursday (August 10). Bitcoin (BTC) led the recovery after an impressive jump from $28,700 to $30,200. However, BTC’s reversal in the middle of the week caused Polygon (MATIC) to stall at the 50% Fib level ($0.7), which is a key resistance.
The Fibonacci retracement tool (yellow) was placed between the mid-July high and the June low. The prolonged downtrend since mid-July surpassed the 38.2% Fib level ($0.655). In other words, MATIC consolidated its losses above $0.655, making the 38.25% Fib level a significant support.
The rise at the beginning of the week failed to surpass the 50% Fib level ($0.70), which is the lowest level in recent times. Retesting the level as resistance after the July CPI data could push MATIC to move in the range of $0.66 to $0.70.
However, bulls could show strength if they turn the 50% Fib level into support, although this may not be very likely. Especially if BTC closes below the $29,500 range on higher time frames (daily/weekly), it could cause trouble.
MATIC’s buying volume declined to around 48% from a 52% sell volume during the early Asian session on August 10. This indicates that sellers have little control and strengthens the short-term bearish trend after the July CPI data.
However, BTC price movement was a significant variable to consider. If bulls fail to maintain $29,500, bears could consolidate the market until the weekend. Unfortunately, any rally above $30,000 could result in a sharp reversal as most investors have locked in their gains at this level. Therefore, there could be a short-term move between the 38.2% and 50% Fib levels for MATIC.