Disclaimer: The results of the following analysis are the sole opinion of the author and should not be considered as investment advice

The long-term outlook for Polygon on the K-chart is not promising. This is common in the cryptocurrency market – only a few tokens are bullish over a longer time horizon. In addition to the K-chart, Polygon has run into trouble in recent hours. The previous day brought news that an error caused Polygon's network to go down for 11 hours. All user funds are safe and a patch was deployed on March 11.

MATIC-12H

MATIC Trading on unstable support levels - will the downtrend continue?

Source: MATIC/USDT on TradingView

MATIC has been trending lower for the past three months. A strong rebound from the $1.30 area in early February sparked a rally northward to $2.04. However, this was not enough to reverse the bullish bias. Since then, MATIC has formed lower highs with each revisit to the $1.50 area.

In particular, the lower highs of $1.54 and $1.7 are the most important levels for the bulls to break through from a market structure perspective. If MATIC is able to break above these levels, not even a session close but just a candle wick, it will prove the idea that the bulls have a say in the market.

Meanwhile, the $1.40 level has not been below its daily closing price for several weeks. On the downside, $1.30 offers a potential area of demand.

Fundamentals

MATIC Trading on unstable support levels - will the downtrend continue?

Source: MATIC/USDT on TradingView

The RSI has formed an exaggerated bullish divergence from price in the past few days. Price formed the same high while the RSI climbed. However, this may only indicate a small rise.

OBV has been steadily moving lower in recent months, which is evidence of selling pressure. The recent weak rebound from $1.40 means that DMI is not showing a strong trend after MATIC.

Conclusion

Risk-averse investors may want to wait for a breakout from the downtrend before buying MATIC. As things stand, the market structure is bearish. The momentum is tilted towards the short side, but not heavily. The levels of $1.54 and $1.7 will be worth watching.