*Polygon (MATIC) Chart on the daily timeframe with price holding at the 200-D Moving Average

The financial markets have turned bearish in the past couple of weeks, with the cryptocurrency markets leading the downtrend. Currently, the big caps, Bitcoin (BTC) and Ethereum (ETH), have been trading below the 30,000 and 2,000 levels. Similarly, small and mid-cap coins have also followed suit, with most of them trading below their 200-day moving averages. Polygon (MATIC) is a standout, as unlike its peers, it has not yet fallen below the 200-day moving average (see purple line).

This 200-day moving average is usually a barometer technicians use to determine whether a stock or currency has officially entered a bearish or bullish market. A cross below this would mean it is in a bearish market, and vice-versa.

Here’s a shortlist of coins trading below the 200-day moving average:

BTC, ETH, RUNE, XEM, DASH, ANKR, COMP, NEO, AAVE, DOT, SOL, BAT, EOS, TRX, LINK, UNI, BCH, XTZ, XLM, ZEC

Polygon (MATIC) Trade Idea: Short on Breakdown

*Polygon (MATIC) Chart daily timeframe. ADX > 30.00 suggests momentum building in the selldown

In the case of Polygon (MATIC), it still has been trading above this 200-day moving average. However, with the current bearish climate, a breakdown below this moving average line seems very likely. It could create another leg down to the next support area of 0.40 to 0.50 if this happens. The Average Directional Movement Index (ADX), which measures the overall strength of a trend, is now above 30.00. This suggests a build-up of momentum in the downtrend of MATIC.

To capitalize on this circumstance, you can short MATIC when it falls below 0.6500, with a target price of 0.40 to 0.50. Watch out: this trade idea becomes invalidated if it bounces and rallies above the 200-day moving average, to 0.7400 instead. Always set a stop loss and manage your risk in any trade.

Trade Summary:

Short: 0.6500
Stop loss: 0.7400
Take Profits: 0.40 to 0.50 (Immediately take half profits at 0.50 levels) (23% to 38% target gain for this trade)
RRR: 1.67 to 2.78
VAR: Risk only 0.25 to 0.50% of your portfolio for this trade.

Polygon (MATIC) is currently the 20th-largest cryptocurrency in the market, with a market capitalization of $4 Billion. MATIC is down 32% since last week.