MATIC Implodes 70% Within Hours After Blistering Bull Run — Price Analysis

  • Short term trend: Potential for excellent bounce plays
  • Long term trend: Uptrend has been destroyed, a period of consolidation likely

Matic Network (MATIC) is certainly the altcoin of the hour, after the most dramatic price fluctuation in the cryptoasset markets during late November. After climbing more than 200% within two weeks, MATIC has today – in a matter of hours – given back all of those gains. The violence of the drop does not bode well for an extension of the uptrend.

We start with a 4-hour MATIC/BTC chart, and see a slaughter. A bearish divergence on the RSI, deep in overbought territory, slightly telegraphed the massive move down. The 21 and 55 EMAs put up absolutely no fight, being sliced-through instantly.

Broken the entire retracement rangeMATIC chart by TradingView

It is hard to know whether this move was caused by a few holders unloading their bags, or whether the market was just very on edge after such a dramatic uptrend. But whatever happened, the market was clearly ready to sell, and stop-losses were set very tight.

For a longer view of MATIC, we must head to Cointrader who hosts more complete charts (although this chart is not exactly the same as the TradingView charts). On this daily MATIC/BTC chart, we can see that price was stopped exactly at the previous all-time high, at about 560 sats. On this chart there is a slightly more forgiving retracement, with price more or less holding within the 200 satoshi area.

Hard rejectionMATIC chart by Charts.Cointrader.pro

We also see that there was no bear divergence showing up on the daily timeframe to telegraph this move, although the drastically overbought conditions was clearly enough to encourage investors to tighten their stops. It would have been much more encouraging for MATIC to hold some more reasonable historical level, perhaps at 340 or 380 sats, rather than taking out almost every retracement level.

However, moving to the 3-day MATIC/USDT chart from Binance, we see that MATIC is stabilizing above a key level, which has served as the principal support/resistance during all of Matic’s price history. Closing above this level, in a day, would be positive, and we could see some serious bounce action on MATIC if this happens.

A close at $.20 would be a good startMATIC chart by TradingView

In case of a larger bounce, we should expect selling around $0.30, at the golden pocket Fibonacci level (.618-65). However, given the stiff rejection at the all-time high and destruction of the uptrend, we should not expect this altcoin to retest that high again any time soon.

The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.

Featured Image Credit: Photo via Pixabay.com

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Bitcoin Dominance Bump Unlikely to Last — Market Analysis

The entire crypto market seems to be going risk-off and turning to a state of correction, after an excellent start to 2020 throughout January and February which saw significant gains. This is reflected in the brief pop in Bitcoin market dominance. But in the longer term, it’s a different story, and we must always bear in mind the intercourse the conflicting trends of different timeframes – and how they can still agree with each other.

Here, rather than focusing on any specific crypto, we’ll look at the market as a whole using some trusted indicators.

We first look at a small-to-medium-timeframe chart of Bitcoin plus Bitcoin’s market dominance arrayed against the “Others” market dominance, Others being a basket of all altcoins below the top 10. This panoply of charts gives us a broad insight into the whole market.

just some speedbumpsBTC chart by TradingView

During January and some of February, we can see clear risk-taking in the form of a rising altcoin market share. Bitcoin’s price was rising even as its dominance was falling: peak altcoin conditions, where so much buying is coming into the system that more entities are buying Bitcoin than selling Bitcoin for altcoins, even when there is a lot of that.

This pattern has reversed in the past few days, with Bitcoin’s price falling even as its dominance rose, with altcoins being sold back into Bitcoin. The market was overheated in the short term, and people are wisely hedging their profits.

But this trend is unlikely to last. Zooming out and looking at a chart of Ethereum/Bitcoin and both dominance charts again (with Ethereum being a general proxy for the altcoin market), we see a different story.

the bigger picture says the opposite thingETH chart by TradingView

There is a lot going on here. First we can note that Ethereum – again, bearing in mind its role as a general proxy for altcoins – has retaken a very important inflection line that it lost during 2019, the dotted line. It is likely, based on this line retaken last week, that Ethereum is starting a long term uptrend against Bitcoin – and that altcoins in general will do the same in the long term.

Moving to the Bitcoin dominance display in the middle panel, we see an agreement of the above thesis. Bitcoin’s dominance has fallen below its own critical level, namely the area near and above 70%, which BTC held for a while during 2019. This level had not been held since 2017, when Bitcoin put in its all-time-high – and it now looks to be trending steadily away from it again.

This trending away will again provide the space for altcoins to grow in market share, and we have already seen the beginning of this trend during 2020. Perhaps what we have seen was only ‘Round One’.

And moving below to the Others dominance, we see that this indicator has, yet again, taken an important level of 6% and is likely trending away from it. This is the same message in reverse: this level was first tickled during the first real altcoin mega-rally, in the beginning of 2017, and stayed above it for years. It was lost for a time in 2019, about the same time Bitcoin retook its level of 70%.

The larger trends are likely moving in the opposite direction than the shorter ones. Bitcoin's price, based on these indicators, is likely to continue rising even as its market share continues to falls. Altcoins, after years of being battered, are likely to continue gaining market share; and in that situation, the pie can only be getting larger overall.

The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.

Featured Image Credit: Photo via Pixabay.com