MATIC Remains Stuck Between a Rock and a Hard Place

Updated

Primary Chart: MATIC Price Chart Showing Overhead Supply Zones and Fibonacci Retracements

MATIC Network Shows Strength in Recent Months Despite Being in a Bear Market

As shown in the Primary Chart above, MATIC network's price continues to trade well below all-time highs of $2.92 / USD. No argument can be made that it has overcome its bear market just yet. Further, the flag / parallel channel that contained price for much of the rally off the mid-June lows has been broken to the downside (see Primary Chart above). Even so, MATIC has shown strength in the past two months since its June 2022 lows. Consider the chart below that shows MATIC having broken out above a downward trendline going back to all-time highs.

Supplementary Chart A: MATIC's Breakout above Seven-Month Downward Trendline

But despite showing strength in recent months, especially as compared to BTC and ETH, MATIC has been trading below major overhead supply zones that reach back over one year to August 14, 2021. The lower of these two supply zones zones was touched several times in late July and mid-August 2022, with a rejection back below it each time. See Primary Chart (above). MATIC also has a demand zone just below its current price. That demand zone is shown as a teal-blue rectangle in Supplementary Chart B below.
Supplementary Chart B: MATIC's Demand Zone as Support

An argument might be made that intermediate-term trading lows have been established at the June 2022 lows. Such an argument would be based on the measured-move concept, where the two legs of a corrective decline are equal or nearly so. In the Supplementary Chart C below, notice how wave A and C of a major A-B-C decline from all-time highs to the June 2022 lows have equality around the $.48 level. Price traded to this level, and broke below it somewhat, before reclaiming it in a reasonable amount of time.
Supplementary Chart C.1: Measured-Move Showing Potential Intermediate-Term Trading Low

Note that just because a measured move target has been met does not mean a correction is complete. Consider, for example, Supplementary Chart C.2 below, which is not a forecast or technical-analysis based price projection. It merely shows a manner in which a corrective pattern can continue upward in a bear market, consistent with complex Elliott Wave corrective patterns, and can continue higher for some time before resuming lower to retest or break the lows.
Supplementary Chart C.2: Hypothetical Example of Complex Corrective Pattern Continuing Higher from Measured-Move Low Before Retesting Lows Later

Despite substantial weakness in equity markets and crypto markets since mid-August 2022, MATIC has not shown sufficient weakness just yet to cause it to fall anywhere near its YTD lows at $.316. In fact, unlike other cryptocurrencies such as BTC and ETH, MATIC has not broken and held below its .382 retracement of the June-August 2022 rally. On the Primary Chart above, note how MATIC has found strong support multiple days right at its .382 retracements. BTC and ETH have not found similar support at their .382 retracement of the recent rally. In fact, BTC has crashed through all its key Fibonacci retracements including the .618 retracement around $20,488.65 and has held below this level (see Supplementary Chart D.2 below). This comaprison shows MATIC's relative strength since the June 2022 lows as compared to BTC and ETH.
Supplementary Chart D.1: ETH Has Broken Through Its .382 Retracement and Has Held at .50 Retracement

Supplementary Chart D.2: BTC Has Broken Through All Its Key Retracements and Has Held below its .618 Retracement

Conclusion: MATIC Network Remains Stuck Between a Rock and a Hard Place

So MATIC is stuck in chop between a rock and a hard place. The rock is the substantial overhead resistance, and the hard place is what appears to be just a few supports standing between price and bear-market lows. A weekly Ichimoku Kinko Hyo (Ichimoku) chart shows just how difficult the resistance is despite incredible price strength in recent months. The cloud remains very thick overhead and red colored and even thicker in the near future, signs of formidable resistance in downtrend. The Kijun line (blue) also stands as strong resistance in addition to the other resistances mentioned in this post. This line decisively repelled price in mid-August 2022.
Supplementary Chart E: Weekly Ichimoku Kinko Hyo Chart

Note the small twist in the Weekly Ichimoku cloud above, however, which suggests a possible weakness in overhead resistance where a rally could theoretically break above the cloud more easily under Ichimoku analysis principles. But the odds of this occurring in the current macroeconomic environment seem bleak at best. Nevertheless, markets do tend to move in unexpected ways, and this twist in the cloud should be monitored in October 2022 to see whether it holds any glimmer of hope for a break back above the weekly cloud. The weekly Kijun must be conquered first, though, and until price can rise above the Weekly Kijun, all talk of a break above the weekly cloud remains premature.

The daily cloud offers a little better picture for the trend in the intermediate term. Price remains above a green-colored cloud that slopes upward ever so slightly. But again, this is insufficient to change the bear-market trend, though it is a necessary first step. Even on the daily chart, price has fallen back below the Kijun line at $.90, and price has also pierced back into the cloud itself, a sign of weakness. Resistance seems to arise to current price action from the top edge of the cloud, called the SSA line.
Supplementary Chart F: Daily Ichimoku Kinko Hyo Chart

Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed.

DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
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BINANCE:MATICUSDT

KUCOIN:MATICUSDT
BINANCE:MATICUSD

Note

MATIC still trades above key support at .68-.77 and below the major supply zones of resistance at about 1.00 - 1.05. Its status of being stuck between "a rock and a hard place" remains valid. But despite weakness in BTC and indices, it continues to show some short term relative strength
As stated in this post, however, weekly Ichimoku Kinko Hyo charts show just how difficult the resistance is despite incredible price strength in recent months. The cloud remains very thick overhead and red colored and even thicker in the near future, signs of formidable resistance in downtrend. The Kijun line (blue) [at 1.03] also stands as strong resistance in addition to the other resistances mentioned in this post. This line decisively repelled price in mid-August 2022."

Note

The weekly and daily Ichimoku charts confirm how MATIC is stuck between support and resistance, and the break of either will likely determine direction in the near term. On the daily Ichimoku chart, price was decisively rejected at the Kijun line around .90 but it remains largely above the lower edge of the cloud itself.

On the weekly chart, price has continued to hold above the Tenkan Sen (gold colored line), which is at .78 today, September 6, 2022. This .78 level coincides with the .77 Fib support discussed in the original post above.

Daily Chart below:

Weekly Chart below:

Note

MATIC continues to trade in a range—above key support at .77 and below the major resistance at about 1.00 - 1.05.

Trade closed: target reached

On September 1, 2022, this post identified a trading zone where MATIC had remained stuck since mid-July 2022. A month and a half later (October 15, 2022), MATIC still remains stuck in this same trading range. The support and lower edge of the range is about $.68 to .77. The upper edge / resistance = about $1.00 - $1.05 (with a key level at $.90 also).

The analysis a month and a half ago was that MATIC was stuck in a range within a downtrend (with some signs of relative strength vs. other cryptocurrencies). This has remained the case for all of September and half of October 2022. This may change when price decides to break out of the range one way or another. There may be a whipsaw move before the real move, as often occurs.

The .382 retracement level identified above was .77. The Ichimoku Cloud (daily) now shows the Kijun line also at .77, confirming that this remains a very important level of support. Price is crawling along this area, though, suggesting it could weaken and break at some point in the future.

The weekly Ichimoku Cloud remains bearish, with resistance at the Kijun at $.91. Back on September 1, 2022, when this post was first published the *daily* Kijun was at $.90. Now the Weekly Kijun is at this level, while the daily Kijun has fallen to the key .77 level, the same as the .77 Fibonacci support. Under that, and the Fibonacci levels are .59 to .68. The demand zone / price support is basically the same at $.62 to .75.

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