Is the price recovery of Polygon (MATIC) about to encounter major obstacles? After falling to $0.5089 on June 10, MATIC has experienced an impressive recovery, but it now seems to be hindered by a blockage at $0.6894, which was previously a support in Q3 2022.
Challenges to overcome for the bulls
Despite Bitcoin (BTC) reclaiming $30,000 at the time of writing, it remains to be seen whether MATIC bulls will be able to break through this blockage at $0.6894 and surpass a low of $0.7893, given the overall improvement in sentiment in the cryptocurrency markets.
- The RSI and OBV on the 4-hour chart show significant peaks, indicating increased buying pressure and rising demand for MATIC. Thus, a breakthrough of the resistance at $0.6894 is possible if BTC maintains the $30,000 zone.
- However, the H4 market structure will only become bullish if MATIC surpasses the low of $0.7893. This level also corresponds to a trend resistance (white line) and could exert short-term selling pressure, especially if BTC retreats from $30,000.
Possible scenarios: rapid rise and pullback
A short squeeze could therefore occur at the immediate resistance of $0.6894, especially if BTC maintains $30,000 and increases. However, short sellers could attempt a re-entry at $0.7893. A move above $0.7893 would confirm a solid bullish intention for MATIC, with a next target at $0.9503 in this scenario.
Open interest rate remains low
Despite strong bullish sentiment, the open interest (OI) rates of MATIC remain low. OI represents the total number of open contracts related to the spot price of MATIC at any given time. Since falling below $0.8, MATIC’s OI has remained below $150 million. A breakthrough of $200 million would indicate strong bullish sentiment in the futures market.
However, the long/short ratio of exchanges highlights that more traders are betting on the downside in the futures market at the time of writing. Unless the gap between short and long positions decreases, short-term sentiment could remain slightly bearish in the futures market.
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