Hello and welcome to another updated article about Matic. While Matic is still in its correction phase, it has shown some reaction to the yellow support region. A few of you have asked if I’ve stopped providing Matic updates.
The answer is no, there just hasn’t been much exciting to talk about amidst the recent volatility. So, let’s dive into what Matic needs to show us to confirm that a low has been established during this wave two correction.
Current Scenario
Many of you will remember that this is still considered a potential one-two setup. However, the likelihood of this scenario has been drastically reduced. In this context, the wave one topped in December, followed by a flat WXY correction. An alternative interpretation places wave one higher up, but this doesn’t change the overall scenario much.
Critical Invalidation Point
To keep the one-two setup alive, the price must stay above the invalidation point at 49 cents. We have already broken below some key support levels for this scenario, significantly reducing its likelihood.
However, I won’t remove the one-two setup from the chart until we break below 49 cents. I’ve highlighted my concerns about Matic several times over recent weeks, especially since it dropped deep into the support area (which I’ve now removed from the chart as it’s no longer relevant).
Potential Scenarios
If Matic breaks below 49 cents, it's quite likely that it will move into a larger wave two. This 12-hour chart shows a decent amount of detail and context. If the one-two setup is invalidated, we would need to consider the larger wave-two scenario.
This alternative scenario becomes increasingly likely if we see a break below 49 cents, opening the door to various bearish outcomes, including potential triangle formations or direct bearish trends.
First Level of Confirmation
For Matic to confirm that it has bottomed, we need to see an initial five-wave pattern to the upside (1-2-3-4-5). Currently, we only have a small one-two setup, which is too small to be reliable and could just be an ABC correction.
The five-wave pattern we need should break above certain resistance levels, such as the trend lines shown on the chart. Specifically, wave three should reach 65 cents or higher, and wave five should reach 72 cents or higher. Once we see this, we can consider calling it a wave one and then look to add the next support region, giving Matic another chance.
Conclusion
That’s the update on Matic. The key takeaway is that we need to remain cautious and wait for a clear five-wave pattern to confirm that a bottom has been established. Until then, we should keep an eye on the critical levels and be prepared for different scenarios.