The price of Polygon's MATIC token has seen marginal gains of 0.19% over the past hour, bringing it to $0.7062. However, this comes after a significant 10.16% drop over the previous 24 hours of trading. Despite the recent weakness, MATIC remains up 6.63% for the week. Over the past month it has declined 39.06%.

With a market capitalization just under $7 billion, Polygon aims to provide scalability and interoperability solutions for Ethereum. Over $326 million worth of MATIC has been traded in the past day, showing there is still interest in the project.

What Factors are Impacting Price Action?

Like the broader cryptocurrency market, Polygon has been under pressure in 2022 amid macro uncertainty. Risk-off sentiment in financial markets has hit speculative assets across the board.

More specific Polygon drivers have also been at play. Delays in Ethereum's transition to proof-of-stake have dampened hype for 'Ethereum scaling solutions' like Polygon. Competition from alternative layer 2 protocols is also intensifying.

However, fundamentals remain strong. Transaction volumes on Polygon continue to rise, showing real world adoption. The focus on interoperability via solutions like zkRollups ties in to blockchain's future. These strengths could eventually turn investor sentiment.

Analyzing the technical data can provide further clues on Polygon's outlook.

What Are the Charts and Indicators Signaling?

Looking at the weekly MATIC price chart, the overriding theme has been a steady downtrend since the 2021 highs. However, basing action appears to be developing which could precede a trend change.

The weekly RSI reading has risen out of oversold territory below 30 back up to around 40. This suggests downside momentum is stalling and could pave the way for a recovery.

MATIC has also found support near the May 2022 lows around $0.35. This level has held as resistance multiple times before, confirming its significance as a macro pivot level.

If MATIC can consolidate for a period above $0.35, it would demonstrate buyers have taken control from sellers. MACD crossing above its signal line would add further evidence of upside momentum emerging.

On the upside, the $1.00 and $1.25 levels are clear resistance areas to watch based on previous price action. Breakouts past these could signal a broader trend reversal.

Should Long Term Investors Buy This Dip?

For long term investors, the question becomes whether Polygon's substantial drawdown from its highs presents a compelling opportunity. As with any investment, understanding risk is key.

The data shows MATIC remains in a weekly macro downtrend, with the potential for more downside to the $0.35 support zone. Any upside appears limited until resistance levels are broken. Investing now still carries some timing risks.

However, dollar cost averaging can help mitigate this exposure. Scaling into a long term position across a wide zone, such as $0.35 to $0.75, allows capturing upside if Polygon rebounds while minimizing downside risk.

For those with a multi-year investment horizon, building exposure at a 60%+ discount from highs could provide strong ROI as adoption continues growing.

When Can We Expect the Tide to Turn for MATIC?

Given the firmly intact downtrend, it's reasonable to ask when Polygon might regain upside momentum sustainably. Historical data provides some clues.

The current drawdown from peak to trough is around -85%. Capitulation often occurs after approximately this magnitude of decline. If sellers are truly exhausted, then trade volume could soon dry up during downswings.

This would indicate MATIC is carving out a macro bottom. Bottoms are a process, not an event. But this basing action could signal the downtrend is entering its final stages before a new bull phase.

Patience and zooming out to the big picture could prove prudent. MATIC's strong use case and adoption metrics suggest its platform has long term staying power, despite any near term volatility.

What Measured Approach Makes Sense Today?

Given the data insights, certain implications emerge for prudent crypto investors in Polygon.

Avoid trying to time short term bottom calls. Allowing MATIC to demonstrate a basing process will provide greater clarity. Chasing temporary bounces often leads to being shaken out of positions.

Dollar cost average buying in the current wide zone between $0.35 and $0.75 allows taking advantage of weakness without the timing risks. Scaling in across this range can provide a good average entry.

Keep perspective that Polygon's deep discount today could yield significant ROI if held through the next bull market. Crypto investments require patience to ride out volatility.

In summary, the data suggests long term investors should begin averaging into MATIC, while traders await clear trend change signals. Maintaining this composed approach will allow fully capturing Polygon's future upside.