- POL tested a critical support level, with potential for a rebound if key levels hold.
- Declining address and transaction activity signals a slowdown, but lower exchange reserves indicate stability.
Polygon [POL] was fast approaching a significant milestone, nearing $100 billion in all-time volume on the Uniswap [UNI] Protocol. This surge in trading activity highlighted its growing importance in the crypto space.
Polygon nearing this achievement signaled increasing recognition and adoption. However, the question remains: can Polygon maintain this momentum and solidify its position as a key player in the market?
Key support levels and potential for a rebound
At press time, POL was trading at $0.2422, reflecting a modest 0.46% increase over the last 24 hours. The price recently broke below a key support level and was consolidating within a descending symmetrical triangle.
The $0.2294 support zone is crucial to watch. If it holds, a rebound towards the $0.3051 resistance level is possible.
Furthermore, the Relative Strength Index (RSI) sat at 34.33, indicating that the asset was in the oversold zone. This suggested that a reversal may be on the horizon.
However, if the price continues below this support, it could face further declines.
Source: TradingView
Declining activity raises concerns
Polygon’s address statistics revealed a concerning downward trend in network activity. New addresses have fallen by 13.43%, and active addresses have decreased by 8.74% over the past week.
Although the network still sees activity during periods of market volatility, the overall trend indicated a reduction in engagement. This decrease in both new and active addresses signals a potential slowdown in adoption.
Source: IntoTheBlock
POL transaction stats analysis: A downturn
Polygon’s transaction statistics indicated a slowdown in on-chain activity.
The volume of transactions in the $0.00 to $1.00 range has dropped by 12.63%, while transactions within the $1.00-$10.00 range have decreased by 31.33%.
Smaller transactions, which generally indicate regular network engagement, are in decline.
This downturn raises concerns about the overall activity level within the network. However, larger transactions have seen a more moderate decline, which indicates that some high-value investors are still active.
Source: IntoTheBlock
Declining reserves signal reduced selling pressure
Polygon’s exchange reserves have decreased by 1.05% in the past 24 hours. A reduction in exchange reserves typically signals less selling pressure, as fewer coins are available for liquidation on exchanges.
This decrease in reserves suggests a more stable market with less immediate downward pressure on the price.
A further decline in reserves could indicate that holders are less likely to sell, possibly anticipating a price recovery.
Source: CryptoQuant
Will Polygon break out or consolidate further?
As Polygon nears $100 billion in all-time volume, the market shows mixed signals. The decline in address activity, transaction volume, and the rise in exchange reserves indicate potential consolidation.
However, if Polygon holds its support levels and the market sentiment improves, a breakout is possible. Therefore, if Polygon manages to reverse its current trend, it could continue its upward journey.
On the other hand, if these trends persist, consolidation may continue for the time being.
