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Polygon (MATIC) value reversed course to the upside on Could 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 stage since July 2021, amid a global market crash led by the U.S. Federal Reserve’s hawkish insurance policies.
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MATIC value rebounded after present process 5 days of relentless declines, attracting consumers across the similar assist stage that had preceded a 275% bull run final 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 record high of $3 by December 2021.
Due to this fact, MATIC/USD may endure an identical, sharp upside retracement within the coming weeks after rebounding from the identical assist confluence.
MATIC fundamentals: Then and now
Nevertheless, lots has modified when it comes to market fundamentals between July 2021 and Could 2022 which will affect MATIC merchants’ habits.
For example, MATIC’s value growth occurred final yr as demand for layer-2 options elevated on account of Ethereum’s skyrocketing gas and transaction costs.
Because of this, common decentralized finance (DeFI) purposes, together with decentralized alternate SushiSwap (SUSHI), liquidity service Curve (CRV), and lending platform Aave (AAVE), expanded their operations within the Polygon chain.
However 2022 has been a nasty yr for cryptos. The Fed’s decision to hike interest rates adopted by the unwinding of their $9 trillion stability sheet has prompted buyers to cut back their exposures to riskier property. Sadly, the prospect of extra money leaving the market has damage MATIC, whose year-to-date paper returns had been practically 65% beneath zero as of Could 10.
Sadly, the prospect of extra money leaving the market has damage MATIC, whose year-to-date paper returns had been practically 65% beneath zero as of Could 10.
Associated: 10-month BTC price lows spark $1B liquidation as Bitcoin eyes $35K CME futures gap
“This can be a risk-off throughout all asset lessons, together with crypto,” Daniel Ives, strategist at Wedbush Securities, told the Monetary Instances, including that digital asset buyers have “nowhere to cover.” He added:
“Some buyers are enjoying 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 Could 9, Polygon CEO Ryan Watt announced that they’re partnering with Meta to create a nonfungible token (NFT) platform for Fb and Instagram.
Meta CEO Mark Zuckerberg additionally confirmed that they’ve been “testing digital collectibles for creators and collectors to showcase NFTs on Instagram,” including that comparable options would come to Fb quickly. The hype might assist MATIC type a robust value flooring.
Huge.
— Michaël van de Poppe (@CryptoMichNL) May 9, 2022
However from a technical perspective, MATIC dangers bearish continuation towards $0.615 in Could.
In the meantime, a bullish affirmation appears much less prone to seem until the token reclaims its 50-week exponential shifting common (50-week EMA; the pink wave) close to $1.37 as assist.
The views and opinions expressed listed here are solely these of the creator and don’t essentially mirror the views of Cointelegraph.com. Each funding and buying and selling transfer includes threat, you need to conduct your individual analysis when making a call.
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