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- Polygon exchange reserves hit multi-month lows, signaling accumulation.
- Technical indicators and buyer dominance hint at a potential bullish reversal.
- Key support zones around $0.18–$0.19 may fuel the next upward move.
Polygon (POL) has seen its exchange reserves drop sharply since mid-October, reaching multi-month lows. This trend indicates a tightening supply, reducing selling pressure from large holders and setting the stage for a potential price rebound.
Exchange Reserves Decline, Indicating Accumulation
When tokens leave centralized exchanges, market liquidity shrinks. Reduced supply can strengthen price momentum once demand rises. At the same time, Polygon’s active addresses are surging, signaling robust on-chain engagement and a growing network. These factors suggest accumulation may be underway, laying groundwork for the next upward move.
Price Action Signals Strength
Polygon’s price remains confined within a descending channel between $0.21 and $0.17. Buyers consistently defend the $0.18 support zone, hinting at accumulation. Technical indicators also provide early optimism: the MACD is showing signs of a bullish crossover, which could ignite upward momentum. If POL breaks above the descending trendline, targets around $0.25 and $0.29 could come into view. However, a drop below $0.17 may expose short-term downside risk.
Bullish Derivatives Data
Futures data shows Taker Buy dominance over the past 90 days, highlighting strong buyer conviction. Spot traders are accumulating at discounted prices, possibly alongside institutional participants positioning for a broader market recovery. This buyer dominance, paired with low exchange reserves, reinforces the case for a potential trend reversal.
CoinGlass data identifies heavy liquidation activity near $0.19 and $0.18. These zones often act as short-term liquidity pools that can trigger price reversals once leveraged pressure eases. Minimal liquidation below $0.175 suggests reduced downside volatility, making current levels a potential base for consolidation and the next upward push.
Polygon’s combination of tightening supply, strong on-chain activity, and sustained buyer dominance hints at an impending rebound. A decisive close above $0.21 could mark the start of its next bullish phase, making the token one to watch for traders and investors alike.
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.
Also Read: AMINA Bank Launches Regulated Polygon (POL) Staking With 15% Yields
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