Polygon (MATIC) price reversed course to the upside on May 10 after testing $0.794 as its interim assist, thus rising by as much as 25% to $0.99.
The rebound occurred a day after the token slumped over 17% to succeed in $0.787, its lowest level since July 2021, amid a world market crash led by the U.S. Federal Reserve’s hawkish insurance policies.
MATIC price rebounded after present process 5 days of relentless declines, attracting consumers across the similar assist level that had preceded a 275% bull run last yr.
A earlier retest of the $0.787-level in July 2021 and the 0.786 Fib line (close to $0.61) of the Fibonacci retracement graph — drawn from the $0.002-swing low to 2.86-swing excessive — adopted up with MATIC rising to its file excessive of $3 by December 2021.
Therefore, MATIC/USD may endure a comparable, sharp upside retracement within the coming weeks after rebounding from the identical assist confluence.
MATIC fundamentals: Then and now
However, a lot has modified when it comes to market fundamentals between July 2021 and May 2022 that could affect MATIC merchants’ habits.
For occasion, MATIC’s price growth occurred last yr as demand for layer-2 options elevated as a result of Ethereum’s skyrocketing gasoline and transaction prices.
As a outcome, in style decentralized finance (DeFI) functions, together with decentralized trade SushiSwap (SUSHI), liquidity service Curve (CRV), and lending platform Aave (AAVE), expanded their operations within the Polygon chain.
But 2022 has been a unhealthy yr for cryptos. The Fed’s determination to hike rates of interest adopted by the unwinding of their $9 trillion steadiness sheet has prompted buyers to cut back their exposures to riskier belongings. Unfortunately, the prospect of extra money leaving the market has harm MATIC, whose year-to-date paper returns had been almost 65% beneath zero as of May 10.
Unfortunately, the prospect of extra money leaving the market has harm MATIC, whose year-to-date paper returns had been almost 65% beneath zero as of May 10.
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“This is a risk-off across all asset classes, including crypto,” Daniel Ives, strategist at Wedbush Securities, told the Financial Times, adding that digital asset investors have “nowhere to hide.” He added:
“Some buyers are taking part in crypto like a hedge towards inflation, however it’s buying and selling just like the Nasdaq’s Siamese twin.”
Silver lining amid chaos: Meta
On May 9, Polygon CEO Ryan Watt announced that they are partnering with Meta to create a nonfungible token (NFT) platform for Facebook and Instagram.
Meta CEO Mark Zuckerberg also confirmed that they have been “testing digital collectibles for creators and collectors to showcase NFTs on Instagram,” adding that similar features would come to Facebook soon. The hype could help MATIC form a strong price floor.
Massive.
— Michaël van de Poppe (@CryptoMichNL) May 9, 2022
But from a technical perspective, MATIC dangers bearish continuation towards $0.615 in May.
Meanwhile, a bullish affirmation appears much less more likely to seem until the token reclaims its 50-week exponential shifting common (50-week EMA; the purple wave) close to $1.37 as assist.
The views and opinions expressed listed below are solely these of the creator and don’t essentially replicate the views of Cointelegraph.com. Every funding and buying and selling transfer entails threat, you must conduct your personal analysis when making a determination.
