Recent market activity within Polygon [POL] has showcased interesting movements, particularly concerning whale investors who capitalized on a market dip to acquire 59 million POL tokens in the past 48 hours. This surge in activity aligns with the current momentum of altcoin season that is sweeping across various sectors.
While the purchase of around 60 million POL by whales may seem significant, it remains relatively modest when compared to the overall supply of over 10 billion POL tokens. The question arises: Could the current valuation and profit margins signal a substantial potential for growth, as implied by these notable investors?
Assessing POL’s Market Value
By examining the Market Value to Realized Value (MVRV) ratio, we find positive readings for both the 30-day and 180-day periods, standing at 35% and 44%, respectively. This indicates that investors who have held POL for either one or six months have seen a +30% unrealized profit.
Despite a recent 20% pullback in prices, investors have managed to maintain their profit levels, suggesting that they may consider selling to secure gains. However, a deeper analysis of profitability among POL holders presents a different outlook.
Although short-term holders have witnessed double-digit unrealized profits, data from IntoTheBlock reveals that they represent only 10% of the total profitable POL holders. Remarkably, over 85% of users, equivalent to more than 500,000 addresses, are still in a loss position. Merely 4% of users, around 23,000, are at the breakeven point, highlighting that a majority of holders have yet to benefit from the ongoing bullish trend.
The prevalent losses could lead many users to maintain their positions in anticipation of at least recovering their initial investments, rather than capitulate at a loss. This behavior, if sustained, could positively impact POL’s upward trajectory and reinforce the recent actions of large market participants.
Analysis of Price Trends
Delving into the price chart, it is evident that POL has room for further upside, supported by the low On Balance Volume (OBV). Projections indicate that a breakthrough above $0.6 may catalyze a robust price recovery.
A decisive breach above $0.8, aligning with a price range from early 2024 and key Fib levels, could signal a continuation of the bullish trend. If POL manages to target its previous highs around $1.2 from March, investors could potentially unlock gains of nearly 160%.