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Polygon (POL) has continued its downward trajectory, experiencing a 34% price decline over the past month. This bearish trend has extended into the past week, with the asset shedding 4.53% in just 24 hours. Analysts suggest that further losses could be imminent, as key market metrics indicate heightened selling pressure and diminishing investor confidence.
Massive Liquidity Outflows Leave 99% of Holders at a Loss
One of the most alarming indicators of POL’s struggles is its significant liquidity outflow. According to AMBCrypto, POL recorded a negative chain netflow in the past 24 hours, meaning more liquidity has exited the asset than entered. Over $13.2 million worth of POL has been withdrawn from the chain, signaling growing bearish sentiment and investor pessimism.
As a result of this liquidity drain, 99.73% of POL holders are currently at a loss, with only a minuscule 0.27% remaining in profit. This extreme imbalance increases the likelihood of a mass sell-off, as holders attempt to cut further losses. If this trend persists, POL could see accelerated declines in the coming days.
POL’s Path to $0.24 Becomes Clearer
Technical indicators suggest that POL is trading within a descending channel, forming lower highs and lows. If the asset breaks its crucial support level at $0.278, a drop to the liquidity zone of $0.243 appears highly probable. This price level was last recorded on February 3, and a further breach could push POL to fresh lows.
Market momentum remains heavily skewed towards sellers, which could exacerbate the decline. If selling pressure intensifies, the asset may struggle to find strong support, potentially plunging below the $0.243 mark.
Spot and Derivatives Market Reflect Bearish Sentiment
The derivatives market echoes this bearish outlook. In the past 24 hours, Open Interest in POL fell by 1.29% to $78.41 million, while trading volume surged by 73.18% to $68.09 million. This dynamic suggests that traders are actively selling off positions, reinforcing the bearish momentum.
Further cementing this sentiment, exchange netflow data shows that $181,500 worth of POL has been sold in the past three hours. As market participants continue to offload their holdings, the downward spiral for POL may persist, placing the asset at risk of deeper price corrections.
With bearish indicators dominating POL’s price action, investors should exercise caution. The combination of massive liquidity outflows, high selling pressure, and deteriorating technical patterns signals that POL’s decline may not be over yet. If market conditions remain unchanged, a drop to $0.24—or even lower—could be on the horizon.
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: Polygon (POL) Faces Steep Decline Despite Surge in User Engagement: Price Prediction and Analysis
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
