Polarity of feedback for a mosfet circuit
No, you are wrong.

You wrote: "...This in turn decreases the drain current of M2 causing a decrease in the voltage at point x.".

The right statement would be:

This in turn increases the M2 drain-source channel resistance causing an increase of the voltage at point x. (This voltage, \$ V_x = I_{in} \cdot R_{channel} \$, while both \$ I_{in} \$ and \$ R_{channel} \$ are increasing in this case).

Don't forget the input source is a current source, not a voltage one. The only path for its current is the drain of M2 -> ground, no current can flow into the M1 gate. When you increase the input current, it can't decrease as it is an independent current source (it is under your full control). So your claim: ...This in turn decreases the drain current of M2... is a contradiction.

The feedback is positive.