Polygon [POL] is on the verge of a remarkable achievement, nearing $100 billion in total volume on the Uniswap [UNI] Protocol. This surge in trading activity underscores its growing prominence in the cryptocurrency landscape. However, as Polygon approaches this milestone, the pressing question remains: can it maintain this upward trajectory and solidify its position in the market?
Currently, POL is trading at $0.2422, reflecting a modest 0.46% increase over the past 24 hours. Despite this slight uptick, the price recently broke below a key support level and is now consolidating within a descending symmetrical triangle. The $0.2294 support zone is crucial—if it holds, a potential rebound toward the $0.3051 resistance level could materialize. Additionally, the Relative Strength Index (RSI) stands at 34.33, signaling that the asset is in oversold territory, which often precedes a price reversal. However, if POL falls below this support, further declines may follow.
A closer look at network activity raises some concerns. Recent address statistics indicate a decline, with new addresses down by 13.43% and active addresses decreasing by 8.74% over the past week. While market volatility occasionally stimulates engagement, the broader trend suggests waning adoption. A decrease in both new and active addresses could signal a slowdown in network growth.
Transaction data further reflects this downturn. Transactions valued between $0.00 and $1.00 have dropped by 12.63%, while those in the $1.00–$10.00 range have seen a sharper decline of 31.33%. Smaller transactions, which typically indicate everyday network usage, are falling. This could point to diminishing retail activity. However, larger transactions have experienced a more moderate decline, implying that some institutional or high-value investors remain engaged.
On a positive note, exchange reserves have decreased by 1.05% in the last 24 hours. A reduction in exchange reserves often suggests lower selling pressure, as fewer coins are available for liquidation. If this trend continues, it could indicate that holders are anticipating a price recovery and are less inclined to sell. A further decline in reserves could contribute to market stability and even fuel a potential price increase.
As Polygon approaches its $100 billion volume milestone, market indicators present a mixed outlook. On the one hand, the decline in address activity, transaction volume, and network engagement suggests a possible period of consolidation. On the other, the reduction in exchange reserves and the potential for a rebound at key support levels could pave the way for renewed bullish momentum.
Ultimately, the coming weeks will be crucial in determining whether Polygon breaks out of its current pattern or continues consolidating. If market sentiment improves and key technical levels hold, a breakout could be on the horizon. Conversely, if the prevailing trends persist, POL may remain in a consolidation phase for the foreseeable future.
By Alejandro Silva Ramírez, Crypto Analyst & Columnist