MATIC[1] formed its ATH at $2.7 in May earlier this year. The past couple of days have seen MATIC trade very near the ATH, and climb to $2.73[2] momentarily as well. A bearish divergence was seen on a lower time frame, and a subsequent dip to $2.57 was readily bought up too.
The bullish pressure behind MATIC has been building for weeks now and could drive MATIC to $3 or even higher. However, $2.52 was a level bulls would not want to see the price drop beneath.
MATIC
Source: MATIC/USDT[3] on TradingView
The Fibonacci retracement tool was used to plot some levels of retracement for MATIC, based on its move down from $2.579 to $1.735. Alongside the retracement levels, higher time frame support levels (green) were also plotted.
The two sets of levels had some confluence at the $2.05 mark and the $2.25-$2.28 area. Hence, these levels assumed greater significance. Over the past few days, a wedge pattern also formed (white), and MATIC broke out above the upper trendline and retested it as support.
The $2.57-$2.6 is a short-term level of significance. Price had climbed to $2.69 and retested this area for buyers in recent hours. As long as price doesn’t drop back beneath the $2.52 level, it remained likely that MATIC would push higher.
Rationale
Source: MATIC/USDT[4] on TradingView
The OBV made a series of higher lows in recent days to denote strong buying pressure. Momentum in the near term also looked bullish, and a pullback to the $2.57 level has already occurred.
On the MACD, highlighted in pink was a bearish divergence- the MACD made lower highs while the price made higher highs. This divergence was followed by a minor dip to $2.57. However, it was likely that
