- The MATIC price is up nearly 21% since hitting a record $ 0.947 on April 30.
- This pullback could turn into a sharp correction if it breaks the 200% Fibonacci extension level at $ 0.734.
- The demand area between $ 0.557 and $ 0.483 will be the next area of interest for sellers.
The MATIC price shows that investors are making a profit, which triggered a sharp correction. Although a higher trough has not yet formed, the development of a lower trough threatens a steeper pullback for Polygon.
MATIC price is at a turning point
In the 12-hour chart, MATIC price starts moving back after setting two higher highs. The current liquidation appears to be related to investors maintaining gains after Polygon posted 174% gains in less than a week.
Fibonacci extension levels of 200% and 161.8% at $ 0.734 and $ 0.617 can serve as supporting barriers. However, a break of $ 0.734 would create a lower low, signaling the start of a correction.
While it is unlikely that if this profit reservation phenomenon snowballs, the demand area extending from $ 0.557 to $ 0.483 will be the last line of defense for the MATIC price. A dip in this area will allow investors whose orders were not placed in the first phase to ride the next wave.
Consequently, investors should watch for a retracement of about 26% before the Polygon price starts to rally to new highs at $ 0.971, which coincides with the 261.8% Fibonacci extension level.
12-hour MATIC / USDT chart
The Global In / Out of the Money (GIOM) IntoTheBlock pattern adds confidence to this 26% retracement, which shows little support between current price and significant support at $ 0.472. Here, about 4500 addresses previously purchased almost 2.4 billion MATC tokens.
MATIC GIOM graphics
The corrective scenario discussed above is not bearish as it gives buyers a chance to recover. However, if the demand barrier at $ 0.467 is overcome, it will invalidate the bullish scenario and cause a 20% drop to $ 0.372.