Polygon (POL) price has formed a series of lower highs and lower lows since December 6, with a close to 50% dip from that period until now. This might not be stopping soon owing to a technical analysis posted by Ali Charts.
Ali suggests that Polygon native token POL could be headed for a continued downturn. According to Ali’s analysis shared on X, POL might be facing a potential 44% correction, with prices potentially dropping to $0.23.
The 4-hour timeframe reveals a concerning pattern for POL traders. A descending triangle formation has emerged, traditionally viewed as a bearish indicator in technical analysis. This pattern shows POL making consistently lower highs while bouncing off a support level around $0.41, corresponding to a key Fibonacci level.
Ali’s analysis becomes particularly relevant as POL has recently broken below the critical $0.41 support level. This breakdown from the descending triangle pattern suggests mounting selling pressure in the market. The pattern’s structure, with its series of lower highs pressing against steady support, indicates that buyers are gradually losing their grip on the market.
POL Price Targets and Fibonacci Levels
Looking at potential downside targets, Ali points to several key Fibonacci extension levels. These include $0.3247 (1.272 extension), $0.2783 (1.414 extension), and most notably, $0.2116 (1.618 extension). The latter aligns closely with Ali’s projected target of $0.23, representing a 44% decline from current levels.
Read Also: 4 Reasons RENDER Price Could Explode Soon: Expert Predicts 13x Spike
However, this bearish scenario isn’t set in stone. As Ali notes, the bearish outlook could be invalidated if POL manages to reclaim the $0.41 level with strong buying volume. Additionally, traders should watch the $0.4836 level (0.786 Fibonacci retracement) as another key resistance point. A successful breach above these levels could signal a potential trend reversal.
The current technical setup, as highlighted by Ali’s analysis, suggests POL could be entering a challenging period. The measured move from the descending triangle pattern supports the possibility of a significant correction. However, as with all technical analysis, traders should consider multiple factors and employ proper risk management strategies before making investment decisions.
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