Could MATIC be primed for another 12% hike

Could MATIC be primed for another 12% hike

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice

MATIC seems to have been rewarded for its resilience at the 61.8% Fibonacci level. After traversing past a bearish setup, MATIC was well-positioned for a push towards $1.34. This would open a route to 5 September’s swing high of $1.80, provided buying pressure does not waver at important price levels.

At the time of writing, MATIC was trading at $1.21, up by 9% over the last 24 hours.

MATIC 4-hour Chart

The last few weeks have been rough for MATIC. A sell-off initiated at $1.80 transpired into a 44% plummet in just two weeks. A few pushbacks were observed at the 50% Fibonacci level, but MATIC did not have the legs for a sustained push.

An emerging symmetrical triangle spelled more trouble and can be expected to play out as a continuation of MATIC’s downtrend. However, the golden Fibonacci retracement zone rose to the occasion. The 61.8% Fibonacci level rekindled buying pressure as MATIC broke north of its upper trendline.

A bit of selling pressure can be expected at 23 September’s swing high of $1.24. However, buyers can hit back at the 50% Fibonacci level, setting up an extended push towards $1.34. From there, MATIC’s journey from $1.34 to $1.51 would be a hard-fought battle due to a lot of sell interest.

Reasoning

The Relative Strength Index highlighted a strong uptrend as MATIC pushed above its symmetrical triangle. However, a move into overbought territory would require stability before the next leg upwards. Meanwhile, the MACD’s recovery above its half-line can be expected to generate some more buying pressure.

Interestingly the Awesome Oscillator was a bit of a precursor to MATIC’s breakout. Bullish twin peaks were spotted on the index. This highlighted an incoming surge in buying pressure.

Conclusion

MATIC can be expected to climb an additional 12% and test its ceiling at $1.34. While some selling pressure can be found at $1.24, traders can go long once MATIC shows signs of a reversal at the 50% Fibonacci level.

However, bullish traders must be cautious of a run back to the 61.8% Fibonacci level as this would expose MATIC to another shakedown.

Source