Cryptocurrency analyst Ali Martinez recently reported that Polygon (MATIC) experienced a significant drop below a crucial supply level, with the token’s price hitting $0.77. In Martinez’s analysis on X, he highlighted the $0.84 to $0.86 range as a critical threshold, where approximately 4.13 billion MATIC had been accumulated by a substantial number of addresses.
Martinez suggested that if MATIC’s price remains below this zone, holders who acquired the token in the $0.84-$0.86 range might opt to sell to avoid potential losses. This selling pressure could further drive down the price of MATIC.
Traditionally, supply zones act as resistance levels where traders place sell orders to take profits. In contrast, demand zones are areas where traders accumulate by placing buy orders. For MATIC to resist further decline, the volume of buy orders needs to outweigh the 4.13 billion MATIC accumulated between $0.84 and $0.86.
However, the likelihood of this scenario seems low, given a 42.25% decrease in the 24-hour trading volume. The MATIC/USD 4-hour chart also shows bears dominating the market between November 20 and 22. Despite recent buying pressure pushing MATIC above $0.77, it does not confirm a sustained uptrend.
As of now, the Moving Average Convergence Divergence (MACD) is in the negative region, indicating increasing bearish momentum. The Chaikin Money Flow (CMF) is also deeply negative, suggesting potential selling pressure. If the CMF drops below -0.20, MATIC may fall below $0.75.
The Relative Strength Index (RSI) reading at 45.34 indicates some buying pressure, but its inability to cross the 50.00 midpoint suggests bears could seize momentum, potentially causing MATIC to drop below the $0.70 threshold. The Directional Movement Index (DMI) supports this outlook, with the +DMI at 15.34 and the -DMI at 24.61, indicating sellers are currently surpassing buyers. The Average Directional Index (ADX) at 31.11 further confirms a strong directional movement favoring bears.
Considering the analyzed trends, MATIC may not surpass the $0.84 to $0.86 supply zone in the short term. Traders may need to reconsider long positions for the token under these circumstances.