Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- MATIC has been consolidating above $0.50 since Aug 18.
- Open interest rates stagnated, but financing rates were negative.
Polygon [MATIC] retreated to the June lows, an important yield level for bulls, but no solid reversal was yet in sight. It posted an additional 8% loss on Aug. 17 before entering a narrow price consolidation above $0.5 from Aug. 18.
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In the meantime, Bitcoin [BTC] had yet to reverse recent losses after falling to $25.16k. At the time of writing, it was struggling to stay above $26k, which could further delay a strong rebound for MATIC.
Is range expansion likely?
Source: MATIC/USDT on TradingView
The Relative Strength Index (RSI) retreated into the oversold zone and has remained there since August 17. It underlines the prevailing selling pressure which had not abated at the time of writing.
Likewise, the Chaikin Money Flow (CMF) teetered below zero. The trend shows moderate capital inflows, reinforcing the bearish trend in the spot market.
MATIC’s decline eased at the bullish order block (OB) above USD 0.50 (cyan). The level is consistent with June lows, which recovered successfully after retesting. However, weak BTC could delay a solid MATIC rebound.
Thus, sellers could lower it to $0.509 if BTC takes additional losses. But a liquidity hunt below $0.50 could not be overruled.
Conversely, a solid rebound could tip bulls towards $0.65 or $0.70, especially if BTC recovers lost ground in the coming days.
How many 1,10,100 MATICs worth today?
Financing rates were negative
Source: Coinalyse
On Coinalyze’s 1-hour chart, Open Interest slightly improved and moved sideways. It illustrates that demand improved slightly and then stagnated. The lack of solid demand in the derivatives market could delay the expected recovery.
The negative funding rates could further exacerbate the situation for those expecting to go long on the asset. The negative value is a bearish signal. Thus, tracking BTC price movements is essential before going long or short on the asset.