Over the last week, Polygon [POL] has experienced a notable uptick of 426% in active addresses, indicating a significant rise in user engagement. Currently, the alternative coin is trading at $0.4533, registering a 1.91% decrease in value in the past 24 hours.
Despite this slight decline, the technical and fundamental indicators for POL appear to be in harmony, suggesting the possibility of an upcoming breakout. Could this altcoin manage to surpass its resistance levels and initiate a bullish trend reversal?
Potential Upside Scenarios
An analysis of POL’s price movements unveils a descending wedge pattern, a classic signal indicating a potential bullish reversal. The formation of a double bottom pattern around the $0.4389 mark has provided additional support, reinforcing the likelihood of a price recovery.
If POL successfully breaches the crucial resistance barrier at $0.5324, it might trigger a significant upward rally. However, sustained buying pressure is crucial for the token to overcome this resistance and move away from its current downward trajectory.
Increasing Network Adoption Signals
The network activity of Polygon has experienced a remarkable surge, with active addresses witnessing a striking 426% surge over the previous seven days. Moreover, the number of zero-balance addresses has surged by an impressive 1,134.82%, indicating a surge in user engagement within the network.
While there was a slight decrease in new addresses by 6.83%, the spike in active users underscores a strong interest in the platform’s functionalities. This expansion in network activity positions the altcoin favorably for potential upward momentum.
Potential for Recovery Based on Technical Indicators
With the Relative Strength Index (RSI) of POL standing at 43.76, it suggests a close proximity to oversold conditions, often preceding an upward price movement.
Furthermore, the Directional Movement Index (DMI) shows a +DI of 14.77, a -DI of 25.35, and an ADX of 22.92, indicating a weakening bearish momentum. A potential trend reversal could occur if the +DI crosses above the -DI, further supporting the case for a bullish breakout.
Surge in Retail Activity Based on Transactional Data
Analysis of Polygon’s transactional data reveals a notable shift in activity patterns. There has been a substantial increase in micro-transactions ranging from $0 to $10 by 1,444% and 1,164.44% respectively, underscoring heightened participation from retail users.
Conversely, larger transactions above $1,000 have witnessed a significant decline, with transactions in the $1,000–$10,000 range dropping by 65.38%. The surge in smaller transactions indicates an increasing utility for everyday transactions on the network.
Examining Potential Price Movements through Exchange Netflow Analysis
Exchange netflow data shows an inflow of 449.6175k tokens, signifying a 0.23% increase. This rise indicates higher liquidity, usually associated with increased trading activity.
This inflow could pave the way for heightened market volatility, potentially positioning POL for a breakout above its current resistance levels.