Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- MATIC’s pullback hit the July lows, erasing all recent gains.
- But buying volumes increased over the weekend.
The bearish sentiment of mid-July is still looming in early August. During this period From Bitcoin [BTC] price action has softened, leaving most altcoins exposed to rollback July gains. In particular, Polygon [MATIC] lost more than 25% after prices fell from $0.89 to around $0.65 (July lows).
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However, MATIC saw renewed interest after retesting the July lows over the weekend (Aug 5-6). Despite the small spike in MATIC demand, BTC struggled to hold $29.0k, and additional losses could expose MATIC bulls to risk.
Will the 38.2% Fib Level Hold?
Source: MATIC/USDT on TradingView
A Fibonacci retracement tool was placed between the June low and the July high. Based on the tool, the 50% Fib level ($0.70) failed to hold the pullback. So far, 38.2% Fib level ($0.655) has been retested twice as support.
At the time of writing, MATIC was bouncing off the 38.2% Fib level. But the higher time frame market structure was still bearish. However, with the weak BTC, price rejection was achievable at the 50% Fib level ($0.70).
Below 38.2% Fib are bullish order blocks on the daily and weekly charts. The daily order block has been honored once and could ease further price decline if the 38.2% Fib level support bursts. Thus, the Fib levels of 38.2% and 23.6% are key levels of interest for bulls.
The Relative Strength Index and Chaikin Money Flow metrics were below the critical thresholds – negative at the time of writing. It implies weak buying pressure and capital inflows, suggesting that the 50% Fib level could act as a roadblock unless BTC makes a strong recovery above $29.5k.
More buying volumes on the weekend
Source: CryptoMeter (MATIC Metrics on August 6)
Despite the negative price charts, overall MATIC spot market statistics recorded renewed demand over the weekend.
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According to cryptometer, buying volume exceeded selling volume at the time of writing. But the overall volume decline of more than 40% could complicate further bull advances.
Nevertheless, the futures market also registered an uptick in demand over the weekend. According to Coin analysisopen interest rates jumped from $122 million to more than $127 million as CVD (Cumulative Volume Delta) rose.
Source: Coinalyse