Over the past few weeks, Polygon (POL), the native token of the Polygon Ecosystem, has faced challenges in gaining bullish momentum.
The price movement of Bitcoin (BTC) has not been favorable either, as POL followed a downward trend alongside BTC without significant gains during BTC’s upward movements.
An analysis by well-known crypto analyst Ali Martinez highlighted that POL had been moving within a specific range since December, fluctuating between $0.414 and $0.531.
Another analysis on a larger timeframe by CryptoCrypto indicated bearish possibilities for POL.
Identification of a Bearish Descending Channel
CryptoCrypto’s assessment agreed with Ali Martinez’s observation of a parallel channel formation, but it pointed out a descending channel on the daily chart for POL.
This descending channel signified a downward trend, consistent with the price behavior over the past month.
Notably, the token displayed a pattern of lower highs and lower lows in each daily trading session since December, with the Awesome Oscillator indicating a prevailing bearish momentum.
While the accumulation/distribution indicator remained within a range without forming new lows compared to December, the Chaikin Money Flow (CMF) stood at -0.15, lower than the late December levels on the same timeframe, emphasizing strong bearish pressure on the token.
Potential support levels could be found around $0.418 and $0.414.
Despite some outflows in mid-December, spot inflows have been relatively subdued since then. Notably, an influx on January 21 led to a 5.9% price decline over the subsequent three days.
However, the correlation between outflows and price movements has been inconsistent, maintaining the overall sentiment of consolidation or a downtrend.
Traders involved in POL should adopt a bearish stance, awaiting favorable bullish conditions to engage in trading activities.
For swing traders, a daily close above $0.464 and $0.507 could indicate opportunities to consider long positions.
Disclaimer: The views expressed in this article are the author’s personal opinion and should not be construed as financial or investment advice.