Matsuri is based on power, not level. My level freezer in UK (lvl 82) basically only face 90 - 95s in matsuri. In the unlikely event that I actually lose a fight, the next opponent is almost certainly going to be a 90+ player of lower power.
The game, more often than not, matches me with people 1-2 lvls below me or above me with 10-20k over me. Even when I lose.