MATIC declines toward second bear magnet

If MATIC can't bounce from the local level of $0.74, then the second bear flag target of $0.69 can potentially play out and be reached.

TLDR

• MATIC broke down from the bear flag and can't bounce from the local level of $0.74.
• The next target is $0.69 if we get more downside.
• Some shorts are piling in, but longs are still fairly balanced.
• Expect a bounce from $0.69, but the bullish bias is still weak overall.

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MATIC 12hr

Technical analysis

• MATIC broke down from its bear flag and reached the first target of $0.75. 
• The second target for the bear flag breakdown is $0.69. 
• If price does fall to $0.69, we would expect this horizontal support level to hold and provide a floor for price to get at least a short-term bounce. 
• The RSI is not overbought on any timeframes, while the larger ones remain bullish; the small timeframes are sub-50 and have a less bullish structure. 
• If price can bounce from here, $0.79 is the level for price to overcome for MATIC to get a more meaningful upside. However, we do not expect a major upside from here. We expect a further breakdown first. 

Market mechanics

• The Open Interest has moved slightly higher to $230m. This is down from the highs of $305m. But $230m of Open Interest isn’t too high, and this may just be the case that it’s readjusting to a higher baseline.  
• The OI-Weighted Funding Rate is at 0.01%, so it is at very neutral levels. From a mechanics perspective, this indicates a positive set-up for MATIC, with Longs and Shorts in even balance. 
• But the Long/Short Ratio is at 0.9566, so Shorts have begun to come in over the past 24 hours. However, Funding remains positive at 0.01%, so overall, this is a healthy setup.

Cryptonary’s take

MATIC still looks relatively weak here. It’s possible MATIC can bounce from the current price, particularly if BTC can bounce. However, we expect MATIC to see more downside soon, with $0.69 as a likely target. 

We would expect $0.69 to provide a strong enough floor for price to bounce from. However, we would look to DCA at lower levels, ideally $0.59 to $0.65.