Over the past few months, Polygon [POL] has shown a lackluster performance in terms of its market value despite undergoing a significant upgrade from MATIC to POL. However, recent data suggests a shift in the trend, hinting at a possible turnaround in the future.
Polygon’s Potential Resurgence
Renowned cryptocurrency analyst Ali Martinez recently shared insights on Polygon through a series of posts, shedding light on several key developments. The price of POL surged by more than 26% over the last week, buoyed by favorable market conditions.
Interestingly, even with the price spike, only a small fraction, around 15%, of POL investors were in profit. This is seen as a positive sign as it indicates low profit-taking behavior among investors.
When investors refrain from selling to lock in profits, the likelihood of a price upsurge becomes more pronounced.
Additionally, on-chain activities within the Polygon network surged, suggesting a growing interest from new investors. This was evidenced by the increasing number of active addresses and transaction volumes associated with POL.
Martinez also highlighted a significant rise in whale activity, with large investors accumulating approximately 140 million POL tokens recently. This surge in whale holdings signifies strong confidence in the token’s future price potential, possibly signaling an imminent price increase.
Moreover, POL’s price movement displayed an upward trajectory within a bullish pattern spanning several years. Martinez suggested that a weekly close above $0.7973 could trigger a substantial rally towards the $15.27 or even $36.17 mark.
Insights from On-Chain Data
Building on the signals of a potential resurgence, CryptoCrypto conducted a deeper analysis of various on-chain metrics related to POL to assess the underlying market sentiment.
Our findings revealed a slight increase in POL’s long/short ratio over a 24-hour period, indicating a higher proportion of long positions compared to short positions. This uptick reflects growing investor confidence in the token.
Furthermore, Polygon’s open interest remained elevated during the previous week’s price surge. A rising open interest usually suggests a higher probability of the prevailing price trend continuing, reinforcing the potential for POL’s resurgence.
However, despite these positive indicators, Polygon faces certain hurdles ahead. To breach the $0.7 mark on the weekly chart, the token must first overcome the resistance at $0.6, as there is a significant liquidation risk at this level.
Typically, a surge in liquidation can trigger a price correction, potentially impeding Polygon’s ability to initiate a fresh bullish momentum.