A significant number of Polygon [POL] token holders are facing potential losses as a large investor sells off 5.64 million POL valued at $2.28 million to Coinbase, resulting in a $1.32 million loss. The investor had acquired these tokens for $3.6 million over the span of the last two months, indicating a change in market sentiment.
This recent sell-off introduces uncertainty regarding the future price movement of POL, which has been struggling to maintain crucial support levels. As bearish momentum gains strength, the question arises – can buyers intervene to regain control over the situation?
Examining POL Price Trends: Will Key Support Levels Hold or Be Breached Further?
Currently, POL is trading at $0.411, reflecting a 3.13% increase in the past 24 hours. Despite this uptick, the price has dipped below a significant demand threshold at $0.45, indicating ongoing downward pressure.
Moreover, the descending wedge pattern hints at the possibility of further declines unless buyers manage to push the price to higher levels. Consequently, if POL fails to sustain itself above $0.40, a more substantial correction might ensue.
Analysis of Holders’ Profits and Losses: Are More Losses on the Horizon?
Data from the blockchain shows that 93.51% of POL investors are currently in a loss position, having bought in at higher price points. Furthermore, only 4.58% of wallet addresses are currently in profit, highlighting a lack of confidence among investors.
With strong resistance observed in the range of $0.43 – $0.45, the bulls must break through this barrier to alter the market sentiment. However, a failure to do so could result in intensified selling pressure and deeper losses for investors.
Unpacking Network Activity: Is there a Drop in User Engagement?
Recent data indicates a sharp decline of 58.67% in the creation of new addresses and a 44.34% decrease in active addresses over the past week. This steep reduction points towards diminishing user involvement, a factor that tends to have a negative impact on price trends.
The dwindling network activity might signal a dwindling demand for POL, making any potential recovery more challenging. Thus, unless there is a resurgence in network activity, POL could continue to struggle in gaining positive momentum.
Assessing Transaction Trends: Are Major Investors Still Acquiring Tokens?
There has been a notable 620% surge in Polygon transactions ranging between $100K and $1M, indicating a heightened institutional interest. However, transactions under $100 have seen a significant decline, suggesting a waning interest from retail investors.
With retail traders playing a crucial role in sustaining market uptrends, their diminishing presence could delay any possible recovery. In the absence of robust retail participation, POL may encounter prolonged downward pressure.
Can Polygon Bounce Back or Will the Downtrend Persist?
Polygon is currently grappling with the challenges posed by whale exits, diminishing network activity, and reduced retail engagement.
Furthermore, unless the token manages to surpass the $0.45 threshold, the scope for bullish momentum appears limited. Therefore, given the prevailing selling pressure and subdued demand, a deeper correction remains a more probable scenario.