The Crypto Market in the Red
The crypto market enters the second week of May in red as macro headwinds persist. In particular, Polygon [MATIC] sustained about 7% losses in the past seven days, according to CoinMarketCap.
In the past 24 hours, the altcoin shed off over 4.5% and traded at $0.8924 at the time of writing. Meanwhile, Bitcoin [BTC] dropped to the $27k price range amidst the U.S. corporate earnings season, a Fed rate hike, and a strong US job report.
Key Support Breached – What’s Next for Bulls?
At the time of writing, the support zone of $0.9170 – $0.9500 (cyan) was breached on the four-hour chart. The support has been crucial in Q1 2023, and the breach could expose MATIC to clear gains made in the first quarter.
Notably, the RSI hit the oversold territory while CMF (Chaikin Money Flow) was below zero – a dip in demand and capital inflows – elevated bearish pressure.
If the bearish pressure persists, MATIC could plunge toward $0.8712 support or the December lows of $0.7505. The cracked support dented any available bullish sentiment and offered short-sellers more leverage.
On the contrary, near-term bulls could attempt to flip the $0.9500 level into support again if BTC reclaims $28k and surges. Such an upswing could help MATIC gain lost ground and push it to reclaim the $1 value.
Supply on Exchanges Dipped
At press time, there was a slight dip in supply on exchanges (blue line), indicating seller exhaustion and declining selling pressure. In addition, the supply outside of exchanges increased slightly, highlighting a short-term accumulation at press time.
Moreover, there was a rise in trading volume, showing MATIC saw some aggressive demand at the current discounted prices.
Although this is hopeful for bulls, the funding rates were negative at press time. A bullish BTC could be a sure sign of recovery and is worth tracking before making moves.+
