Has Polygon token lost its bullish momentum, or could we see more gains?

• Polygon hit the headlines recently with strong fundamentals
• The native token MATIC has seen a lot of investor interest as the token hit $1
• MATIC faces a correction, and investors should wait

Polygon’s MATIC/USD trades at $0.89. That happens after the token was rejected by a resistance at $1. It should be noted that MATIC was among the top gaining tokens recently. It traded at barely $0.32 in mid-June. Thus, the latest decline could be due to investors’ profit taking as the price hit $1. 

Fundamentally, Polygon has been making headlines lately, fueling MATIC’s surge. In Q2, the average transaction cost on Polygon declined to $0.018 from the previous quarter. The total unique addresses also grew by 12% from the first quarter to 5.34 million. The transaction volume on the network hit $284 million, an increase of 4% from the prior quarter.

Clearly, there is sufficient reason to support the latest MATIC gains. The Ethereum Layer-2 scaling solution is undoubtedly poised for growth. Investors could be looking for the perfect entry point. Our analysis suggests that investors may need to wait as MATIC could face correction.

MATIC faces a correction as bear pressure increases

Source – TradingView

From the technical outlook, bulls are beginning to weaken at or close to $1. The MACD line has closed below the moving average line suggesting a bearish momentum. Multiple bearish pin bars at the resistance zone are also another trigger for a further price decline.

Investors should sell MATIC for a chance to buy lower. The main key level remains at $0.61 support, although the price may recover around $0.72.

Summary

MATIC faces a correction as bulls were rejected at the $1 resistance. The key areas of interest are $0.72 and $0.61. The lower level is the established support.