Polygon [MATIC] traders can build a breakout strategy from this pattern

Disclaimer: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.

By stepping up its recovery efforts, Polygon’s [MATIC] The latest bull run has propelled a bullish reversal on the 4 hour EMA ribbons. However, the $0.87-$0.88 range prompted a resurgence in selling to cause compression near the edge of the ribbons.

An extended close below the bullish channel (yellow) would confirm a breakout and hint at increasing selling vigour. A reliable rebound from the 20 EMA must occur to prevent short-term bearish tilts. At press time, MATIC was trading at $0.8787.

4 hour MATIC chart

After an expected breakdown of its previous bearish pennant, MATIC showed strong rebound trends from the base line of $0.76.

The recent revival of the ascending channel has helped the MATIC bulls test the crucial resistance range of $0.88-$0.87. Also press time market sentiment next to this range of resistance has created a relatively favorable environment for the bears.

Additionally, the last three candlesticks have taken a bearish position forming a evening star pattern. A likely series of red candles could further rekindle the selling edge.

A robust close below the $0.87 level could set MATIC up for a short-term decline. Sellers would seek to test the Range of $0.83 to $0.84 before a probable revival.

However, a swing above the 20 EMA could ensure a slow phase in the current resistance range. But the bulls had yet to trigger a spike in trading volumes to sustain a close above the immediate resistance range.

Reasoning

The Relative Strength Index (RSI) dipped below the 56-level resistance to depict a diminishing buying advantage. Any drop below the breakeven would confirm the bearish bias in the press time.

The MACD the bearish crossover has inflicted southerly tilts. A continued decline would resonate with the bearish stance of RSI.

Nevertheless, the CME lower lows had the potential to assert bullish divergence with price. But for that, the bulls need to hold the -0.12 level.

Conclusion

The drop in MATIC below the ascending channel after an evening star candlestick pattern hints at potential bearish movement. The drop below $0.97 could confirm this narrative. The objectives would remain the same as those discussed.

Finally, investors/traders should keep a close eye on Bitcoin’s movement, as MATIC shares a 75% 30-day correlation with the master coin.