Polygon Whale Dump Impact Evaluation: $41.2 Million Worth of POL Tokens Sold
After reaching a recent peak of $0.7675 a fortnight ago, Polygon [POL] has faced challenges in sustaining an upward trend. Consequently, the cryptocurrency has experienced a decline, hitting a low of $0.48. Due to the ongoing dip in POL’s value, a significant number of investors have opted to liquidate their holdings. This selling pressure, particularly prevalent among large holders, is a strategy to avoid further financial setbacks.
Significant Sale of 80 Million POL Tokens by Polygon Whales
An examination conducted by Ali Martinez revealed that major Polygon investors, commonly referred to as whales, have initiated a selling spree. Reports indicate that these whales have offloaded more than 80 million POL tokens equivalent to $41.2 million within the last 48 hours.
The escalated whale sell-off typically triggers heightened selling activities, leading to a downward push in prices. This is manifested through a declining Relative Strength Index (RSI) that has plummeted from 71 to 40, approaching the oversold zone. Such a decrease indicates a current trend where a majority of holders, including whales, are opting to sell off their assets.
When whales divest their holdings, it signifies a lack of faith in the market’s movement. They choose to capitalize on recent profits while evading probable losses. The bearish turn by whales serves as a cautionary indicator for individual traders concerning a potential market downturn.
This negative sentiment has now spread among individual traders, evident in the rise of short positions. According to Coinglass, a considerable number of investors have taken up short positions. With these positions accounting for 55% of the total, it suggests that a majority anticipates an imminent price decline.
Analyzing POL’s Market Performance
The enduring decline in POL’s value over the past week has shifted the overall market sentiment of whale investors to a pessimistic view.
This continuous divestment by major holders is vividly mirrored in Polygon’s price charts. As it stands at the moment, Polygon is valued at $0.5176. This translates to a 6.22% daily decline on the charts. Over the weekly timeline, the altcoin has experienced a substantial drop of 21.31%.
The consistency of the recent decline amid intensified selling activities suggests a deepening downtrend. The Directional Movement Index further confirms this, with the ADX positioned above +DI at 28.
Additional evidence supporting this downtrend is visible through a negative Price DAA divergence. A sustained decrease in this metric affirms the continuation of the prevalent market trend.
As a result, the robust downward drive of POL may lead to further price depreciations on the charts. Should a decline occur, Polygon is expected to find a support level around $0.48. Nonetheless, in a reversal scenario, POL could aim to reclaim the $0.53 mark.