- MATIC price plummets almost 60% on an intra-day basis, bringing exceptional rally to an end.
- Polygon started today with a modest advance, despite the broader weakness in the cryptocurrency complex.
- Made-in-India digital token is positioned as the 15th largest cryptocurrency by market capitalization.
MATIC price sustained a significant intra-day collapse today, but the altcoin has rebounded from a 60% loss to just a 17% loss from price at the time of writing. The decline does end the tremendous rally for Polygon since April 26, but it does not alter the underlying fundamental momentum behind the Ethereum scaling solution.
MATIC price juggles bullish fundamentals with an uncertain market
From the April 26 breakout until today’s high, MATIC price has climbed over 500%, lifting it near the top of the best performing cryptocurrencies during that time frame and confirming the accelerating growth in the decentralized finance (DeFi) segment and for the scaling solution offered by Polygon. Co-founder Jaynti Kanani said in February that they want Ethereum to be more robust.
With Polygon, we want to enable ethereum to become a robust, highly-scalable multi-chain environment that acts as the backbone of the Web3 revolution.
The faster and cheaper transactions Polygon offers are in strong demand due to high transaction costs on Ethereum’s network. The number of applications built on Polygon has spiked 800% since January to almost 400, positioning the firm to realize its big goal of becoming the third-most valued crypto project in the world.
At today’s high, MATIC price had nearly tagged the 361.8% Fibonacci extension of the mild May decline at $3.01, a target price outlined in a May 16 FXStreet article. The daily and weekly Relative Strength Index (RSI) readings reached extreme and projected a consolidation or correction.
The MATIC price decline today has altered the short-term outlook for Polygon. Residual selling pressure is likely to follow in the coming days as the intense price compression of the 60% decline is released.
If renewed selling accelerates, MATIC price has a few support options beginning with the topside trendline of the March and April highs at $1.33 and then today’s low at $1.01. The 50% retracement of the April-May advance sits at $0.91.
MATIC/USD daily chart
With several hours remaining in the trading day, investors need to see how MATIC price closes. A continuation of the rebound would position it to attack new highs in the short-term after removing every weak holder in the altcoin.
Outlier days, like today, leave uncertainty and restricted insight into the price direction moving forward. Investors need to let Polygon prove itself, not the other way around.