A significant number of Polygon [POL] holders are encountering potential losses as a large investor sells 5.64 million POL valued at $2.28 million on Coinbase, resulting in a $1.32 million loss. This investor had acquired these tokens for $3.6 million over the past sixty days, indicating a shift in market sentiment.
Furthermore, this sale introduces uncertainty into the price movement of POL, which has been struggling to maintain crucial support levels. Consequently, as bearish momentum intensifies, can buyers intervene to regain control?
POL’s Price Movement: Will the Support Levels Hold or Further Deteriorate?
Currently, POL is trading at $0.411, exhibiting a 3.13% increase in the last day. Nonetheless, the price has fallen below a significant demand area at $0.45, indicating sustained bearish pressure.
In addition, the pattern of a descending wedge implies the possibility of more downsides unless buyers recapture higher thresholds. Hence, if POL fails to maintain levels above $0.40, a more profound correction may ensue.
Profitability of Holders: Are More Losses Expected?
Data from the blockchain shows that 93.51% of POL holders are currently facing losses, having purchased the token at higher valuations. Moreover, only 4.58% of wallets are currently in profit, underlining waning investor optimism.
With significant resistance between $0.43 to $0.45, bulls need to break through this resistance barrier to alter the market sentiment. In contrast, failure to do so could escalate selling pressure and deepen the financial losses.
Network Activity Analysis: Is User Engagement Declining?
The number of newly created addresses has plummeted by 58.67%, while active addresses have declined by 44.34% in the past seven days. This sharp reduction signals a diminishing level of user participation, a factor typically associated with bearish price movements.
Moreover, reduced involvement could indicate weakened demand for POL, hence hindering any potential recovery. Consequently, without an upturn in network activity, POL could struggle to gain positive price momentum.
Transaction Insights: Are Major Investors Still Acquiring?
Transactions involving Polygon in the range of $100K to $1M have surged by 620%, suggesting increased institutional interest. Conversely, transactions below $100 have witnessed a notable decline, indicating fading retail engagement.
In addition, retail traders play a crucial role in sustaining market rallies, and their diminishing presence could impede any potential rebound. Without robust retail involvement, POL might continue to confront downward pressure.
Can POL Rebound or will the Downtrend Persist?
Amid whale sell-offs, declining network activity, and reduced retail engagement, Polygon is grappling with challenges.
Moreover, unless the coin manages to reclaim the $0.45 mark, bullish momentum will likely remain constrained. Hence, with ongoing selling pressure and tepid demand, a more profound market correction seems probable.