MATIC price had been a relative strength leader in the crypto complex. Still, lately, the failure to hold key technical support levels has raised the probability of a weaker price in the medium term. The overhang of key points of resistance level coupled with a bearish pattern suggests that Polygon Matic investors will not be rewarded with better profit outcomes.

Polygon MATIC price encounters a challenging climb

MATIC price established a descending triangle pattern level on a line chart beginning at the May 18 high and extending into the end of June. The pattern is distinguished by a trend line level that connects a series of lower highs and a second horizontal trend line level that connects a series of lows. The framework generally develops during a declining trend channel as a continuation pattern; however, there are numerous examples of descending triangles pattern forming as reversal patterns, as with Polygon Matic. Regardless of where they form, descending triangles patterns are bearish and indicate distribution.

On June 22, Polygon MATIC price printed the second reaction low to create the horizontal trend line. On June 25, Polygon Matic briefly undercut the June 22 low of $1.075 and the original reaction low on May 23 of $1.072 level before rebounding higher. The bounce could be a bear trap, but it may just another leg higher within the context of filling the descending triangle pattern. For now, the pattern remains bearish until there is a successful breakout above the triangle’s upper trend line.

The measured move of the descending triangle is 56% or a MATIC price low of $0.464.

Polygon price confronts a myriad of resistance levels on the daily and weekly chart. The resistance of note is the anchored VWAP from April 26 at $1.323, followed closely by the symmetrical triangle’s upper trend line level at $1.39, and finally, the 50-day SMA at $1.500.

The meshing of the three resistance points is reinforced by the daily Ichimoku Cloud, the 2020 broken trend line, and the 10-week SMA at a price of $1.321. Combined, all the levels configure an intimidating barrier that puts downward pressure on Polygon Matic and requires more than a dead-cat bounce, facilitated by meager volume totals, to overcome.

One on-chain metric that suggests more Polygon MATIC price weakness is around the corner is the 365-day MVRV ratio, currently at 140.53%. It reveals that the average gain of all addresses that have acquired Polygon MATIC in the previous year stands at 140.53%. A notable comment about the potential selling pressure remains despite the sell-off in May and recently in June.

Generally, the higher the MVRV ratio, the greater the unclaimed profits, thus the higher the risk that Polygon Matic holders will begin to sell and lower their exposure. This is why it is believed that extremely high MVRV ratios, such as the Polygon MATIC ratio, indicate overvalued conditions and reason to sell. In contrast, very low MVRV ratios may offer a timely opportunity to accumulate.

The Polygon MATIC MVRV ratio is significantly higher than the majority of cryptocurrency after the correction. It confirms a reservoir of selling pressure that could enter the Crypto market should things turn negative again in the cryptocurrency complex or if the Polygon Matic fundamental story loses momentum.

Moreover, the elevated MVRV ratio demonstrates enough potential selling pressure to drive Polygon MATIC price to the measured move target of $0.464, or a decline of 56%.

A second on-chain metric countering Polygon MATIC price strength is the number of new addresses created on the Polygon platform. The number has fallen 63% since June 15 and officially broke the 2021 trend line beginning in March. The Matic trend line was held in May. 

The substantial decline in interest in Matic in the second half of June, despite the price not nearing the May low, raises doubts about the outlook for the digital asset.

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