Will Polygon Reverse Its Downtrend?

The price of Polygon (MATIC) has dropped nearly 50% since the beginning of 2024, raising concerns among investors. However, the current trend indicates signs of a possible bullish recovery, provided certain conditions are met.

Whether you already hold Polygon or are considering buying, it's crucial to monitor future price developments to capitalize on the potential of this promising cryptocurrency.

Weekly time frame analysis

MATICUSD - 1 Week Time Frame

The ongoing downtrend has pushed the market below its 2023 low, attracting enough sell-side liquidity to trigger potential paired buy orders from institutional participants. For retail traders, it's important to observe price action closely after liquidity has been absorbed.

The key parameter to confirm buy orders is the Inversion Fair Value Gap (IFVG), also known as the support zone formed from a previous resistance level. Currently, this support zone is not fully confirmed, as the weekly candle has yet to close (expected in three days). This crucial zone is highlighted in orange on the chart.

When to buy MATIC?

If the price closes above this orange support zone, it will signal a potential entry point with full volume, keeping in mind the importance of setting limit orders such as Stop Loss (SL) and Take Profit (TP).

The recommended SL should be placed below the internal low, while TP levels are set at the inner and outer highs, where buy-side liquidity is expected. This liquidity is necessary for institutional market participants to exit their buy positions.

By closely monitoring these key levels, traders can better position themselves to take advantage of a potential bullish recovery in Polygon's price.