Throughout the recent week, POL has experienced a significant decrease of 18.90% in its value, indicative of prevailing bearish sentiments throughout the market. Over the past 24 hours alone, this digital asset saw a further 1.15% drop, reinforcing the dominance of bears in the current market scenario.
An evaluation conducted by CryptoCrypto has revealed that the ongoing downward trajectory of POL may show no signs of immediate respite, with expectations of potential further losses in the short term.
Could a Positive Reversal Pattern Impact POL’s Bearish Momentum?
At the moment, POL is observed to be trading within a descending channel – a pattern characterized by price oscillations between established support and resistance levels.
Current indications suggest that the price is testing a support level at 0.4731, positioned in the middle range of this channel, with an additional support threshold at 0.4583 below.
Under normal circumstances, this situation might hint at a potential strong uptrend. Nevertheless, a more detailed analysis reveals that the asset has encountered resistance at this level, failing to exhibit any considerable upward momentum.
Further research by CryptoCrypto indicates that prevailing on-chain data minimizes the probability of a positive shift, given the notable increase in exchange reserves, thus suggesting limited potential for a reversal at this juncture.
Growing Exchange Availability Elevates POL’s Risk Profile
The quantity of POL accessible on various exchanges has notably surged. Data from CryptoQuant highlights that Exchange Reserves have surged to over 57 million, reflecting a rise of around 2 million compared to the previous day.
Such an increase typically signifies a movement of POL holdings by traders back to exchanges, thereby inflating the supply. These shifts often precede sell-offs, which can consequently steer POL’s value downwards.
Moreover, the number of active addresses has exhibited a continuous decline, now standing at 1,231. This decrease indicates reduced engagement, with fewer addresses influencing price actions. A drop in active addresses is commonly associated with waning asset interest, often linked to dwindling investor confidence.
Simultaneously, insights from IntoTheBlock demonstrate a decline in the average transaction size, with the 24-hour average plummeting to $4,908.63 – marking the lowest point for the week.
This decline emphasizes a notable reduction in the value of transacted POL, signaling decreased market activity.
Collectively, these patterns indicate a waning investor enthusiasm, heightening the likelihood of sustained downward pressure on POL’s valuation.
Trader Positions Face Closure Pressures
Open Interest has dwindled by 2.60%, settling at $88.30 million. This decline suggests a surge in closed contracts as the market trends downwards.
Similarly, liquidation data underscores a proclivity for short traders, given that a majority of long contracts have been liquidated. In the previous 24 hours alone, long contracts worth $225,670 were closed, in contrast to merely $58,380 in short contracts.