Polygon with the MATIC price shows that traders have made huge profits from the last major correction. While a higher bottom has not been formed yet, the formation of a lower low poses a much harder retreat threat for Polygon.
On the 12-hour chart, MATIC price begins to retreat after setting two highs. The current sale seems to be due to investors making a profit after Polygon witnessed a 174% bull rally in less than a week.
The 200% and 161.8% Fibonacci extension levels at $ 0.734 and $ 0.617 can serve as support barriers. However, a possible break at $ 0.734 could create a lower bottom, signaling the start of a retracement.
If unlikely, if this profit-gathering phenomenon rises like an avalanche, the demand zone from $ 0.557 to $ 0.483 will be the last line of defense for the MATIC price. Diving into this area will allow investors, whose orders were not placed at the first stage, to move on to the next wave.
Therefore, traders should watch out for roughly 26% retracement before Polygon price starts forming new highs at $ 0.971, which coincides with the 261.8% Fibonacci extension level.
IntoTheBlock’s Global In / Out of the Money (GIOM) model supports this 26% correction. This pattern shows a small level of support between the current price and the key support at $ 0.472. About 4,500 addresses here have previously purchased around 2.4 billion MATC tokens.
The corrective scenario outlined above is not bearish as it gives buyers a chance to recover. However, if the $ 0.467 demand barrier is exceeded, it will invalidate the bullish scenario and a 20% drop to $ 0.372 may become possible.