The cryptocurrency POL has experienced a notable downturn in recent weeks, with its price dropping by 18.90% over the past seven days. As the broader market remains in a bearish trend, POL has seen additional pressure, with a 1.15% decline recorded in the last 24 hours. Despite these struggles, analysts are watching closely for any signs of a potential reversal.
Descending Channel Restricts POL’s Upside Potential
POL is currently trading within a descending channel, characterized by lower highs and lower lows. The cryptocurrency’s price is hovering near the mid-range support level of $0.4731, with a secondary support level around $0.4583. These levels have historically offered a cushion for potential rebounds, yet POL has failed to demonstrate significant signs of recovery. The lack of upward momentum suggests that bearish sentiment continues to dominate, and the coin is struggling to break free from its current downtrend.
Exchange Reserves Surge as Sell Pressure Mounts
Recent data reveals a sharp increase in POL’s exchange reserves, now exceeding 57 million—up by 2 million within just 24 hours. This rise is a concerning indicator, as it typically suggests heightened sell pressure. Traders often move assets to exchanges in anticipation of liquidation, a trend that generally leads to further price declines.
Additionally, POL’s active addresses have decreased to just 1,231, signaling reduced investor confidence and lower participation in the market. A drop in active addresses often correlates with declining market activity, adding to the bearish outlook.
Also Read: Polygon (POL) Price Analysis: Bears Dominate as Exchange Reserves Surge and Market Activity Slows
Declining Market Activity and Reduced Trading Volume
Transaction data for POL further underscores the weak market sentiment. The 7-day average transaction size has fallen to $13,796.37, and the 24-hour average transaction size dropped to $4,908.63, marking the lowest level this week. This sharp decline in trading activity reflects waning investor interest and diminishing market engagement.
Moreover, open interest in POL contracts has dropped by 2.60%, signaling reduced trader participation. Liquidation trends show that short positions are dominating, with long contracts valued at $225,670 being liquidated in the past 24 hours, compared to only $58,380 in short positions.
Bearish Outlook Continues for POL
With reduced market activity, an increase in exchange reserves, and decreasing investor interest, POL faces continued downward pressure. Unless there is a clear reversal signal, the asset’s bearish trajectory is likely to persist in the short term. Investors and traders alike will need to stay cautious as the market awaits any potential catalyst that could shift the current trend.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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