Over the past week, Polygon (POL) witnessed a growth of 13.74%; however, recent market sentiment has shifted, leading to a bearish trend in the asset’s trajectory.
In the last 24 hours alone, the price of POL has dropped by 8.12%, indicating a possibility of further decline in the near future.
Whales Selling Off Accelerates POL’s Decline
The intense selling pressure on POL is mainly attributed to whale activity, which has contributed to a significant decrease in the price and fueled a shift towards a bearish market trend.
Two crucial metrics from IntoTheBlock—Large Holders Netflow to Exchange Ratio and Large Transaction Volume—have underscored this prevailing pattern.
The Large Holders Netflow to Exchange Ratio monitors the movement of assets from large holders, commonly known as “whales,” to exchanges. An upsurge in this ratio, coupled with a price slump, typically signals heightened selling pressure.
For POL, this ratio spiked by 737.00% in the last 24 hours and surged by 2,474.58% over the past week, aligning with the overall bearish sentiment as whales offload their assets.
Furthermore, a surge in large transaction volume, with 78 significant transactions recorded during this period, further solidifies this bearish sentiment.
Potential Respite or a Reversal in the Trend?
Despite the ongoing sell-offs by whales, the daily chart indicates a possible temporary support level for POL at a critical threshold, which could potentially pave the way for a price recovery.
The support level at $0.3634 might generate sufficient buying interest to alter the momentum, with a potential price rebound targeting $0.5792.
However, in the face of persistent selling pressure from major holders, POL risks further decline, with a potential slide to $0.2855.
Increased Selling Pressure from Retail Investors
IntoTheBlock data indicates a significant drop in POL’s Open Interest over the past 24 hours to $142.53K following a peak of $198.56K on November 9th.
As a result, bearish sentiment has become predominant in the unsettled derivative contracts within the market.
Coinglass’s liquidation data also reflects this pessimistic viewpoint, with only $24.98K in concluded short contracts compared to a notable increase in long contracts to $685.75K.
This imbalance underscores the prevalent downward momentum, with more long positions being liquidated, suggesting a higher likelihood of a further decline in POL rather than an expected upturn.