As of the latest update, Polygon [POL] was priced at $0.655, marking an 11% increase within a 24-hour period. This positive movement signifies a shift from previous bearish trends, despite the coin still experiencing a 7% decline over the past week.
Similar to many other alternative cryptocurrencies, Polygon witnessed a significant uptrend towards the end of November, only to encounter obstacles earlier this month. This upward trend, accompanied by a subsequent decline, has now formed a bull flag pattern on the four-hour chart of POL.
The bull flag formation indicates a potential continuation of the uptrend for POL, although a surge in buying activity is required to validate a breakout.
An analysis of the volume histogram bars reveals minimal trading activities on both buying and selling fronts. However, the Money Flow Index (MFI) indicates a rising trend in buying behavior, reaching a value of 62.
Furthermore, the Moving Average Convergence Divergence (MACD) highlights a shift in control towards the bulls, as indicated by the change in color of the MACD histogram bars to green, signaling increased buying interest.
Simultaneously, the uptrend in the MACD line on the shorter timeframe could lead to a confirmation of short-term bullishness once it crosses above the signal line.
Crucial Watch Levels
An assessment based on the In/Out of the Money Around Price (IOMAP) metric offered by IntoTheBlock indicates that around 10,000 wallet addresses purchased POL within the price range of $0.65 to $0.67. This range may act as a support level, with a potential downward movement if breached.
Conversely, attention should be paid to the significant number of addresses, totaling 10,270, that acquired more than 31 million POL tokens between the price levels of $0.67 and $0.69. This range is likely to serve as a robust resistance level, as these holders might contemplate selling once profitability is achieved.
Influence of Polygon’s Decentralized Applications on Price
Recent data from DappRadar points to an 8% decline in Polygon’s seven-day DApp volumes, now standing at $2.41 billion. Moreover, there has been a 10% drop in Unique Active Wallets (UAWs).
In contrast, in the realm of decentralized finance (DeFi), Polygon has experienced a notable recovery. The Total Value Locked (TVL) has surged to $1.195 billion according to DeFiLlama, representing its highest level in over a month.
Should the Polygon network demonstrate sustained strength and expansion, this could positively impact the trajectory of POL.
Shifting Sentiment as Indicated by Long/Short Ratio
After a period of increased short-selling activity, Polygon’s long/short ratio plummeted to a monthly low of 0.79 on December 9th before rebounding to 0.90.
Despite the recovery, the bearish sentiment remains dominant, with 52% of traders being short sellers. This positioning reflects a lack of optimism among traders for a continuous upward trend in the near future.