Traders left hanging as Polygon becomes clueless on Fed comments

• Polygon price whipsaws on Tuesday after barely turning red in a volatile Monday session.
• MATIC bulls are gutted by Fed officials pushing against market enthusiasm.
• Expect to see price action going nowhere with $0.90 still in the cards if bulls can salvage the situation.

Polygon (MATIC) price action tanked after popping higher in early trading on Tuesday. A similar picture to Monday emerged after two US Federal Reserve officials issued warnings and pushback against market enthusiasm after a few indicators on Friday showed a firm cooldown in the US economy. This is what the Fed wanted, and markets calculated that a Fed pivot would be nearby, which may not be the case.

Is Polygon price at risk of collapse?

Polygon price saw traders letting the dust settle since more hawkish Fed speakers Raphael Bostic and Mary Daly are non-voters in the upcoming rate decision. Traders instead wanted to hear from the big chief himself as Jerome Powell spoke at a symposium at the Swedish Riksbank on Tuesday morning. The event turned out to be a non-event as Powell refrained from any comments toward the US economy and its rate path.

MATIC thus could see traders stick to their guns and push price action back above the important 55-day Simple Moving Average (SMA) near $0.84. If price action can keep pushing higher, expect to see $0.90 tested by the end of this week. If US inflation numbers also drop substantially, expect the monthly R1 resistance level to be turned into support and project $1 as the price tag for the end of January.

MATIC/USD daily chart

Risk to the downside comes with the close this evening. Should price action drop substantially and close below that 55-day SMA, the risk could be that traders take profit and a sell-off gets underway. Expect the 200-day SMA to initially provide support, with the monthly pivot near $0.82. Once that level is broken, expect MATIC to tank toward $0.75 for an over 8% loss.