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Key Takeaways:
- POL jumped 10.43% amid $10.4M in Ethereum inflows.
- Price action faces resistance at $0.0000775, historically a rejection zone.
- Spot and perpetual markets indicate bearish trader sentiment despite the rally.
Polygon [POL] saw a significant 10.43% surge in the past 24 hours, trading at $0.2065 at the time of writing. The move was largely driven by fresh capital flowing from Ethereum to Polygon, signaling growing interest in the layer-2 token. However, despite the strong upside, market data now hints at weakening momentum as sellers tighten their grip on both spot and derivative markets.
Ethereum Liquidity Boosts Polygon’s Upside
According to data from Artemis, Ethereum investors played a pivotal role in Polygon’s rally. Over $10.4 million in net inflows moved from Ethereum to Polygon in the last 24 hours—a strong indicator of rising demand for POL.
Historically, such bridge netflow surges have triggered bullish price movements, and POL’s recent breakout from a descending channel supports this trend. However, while the breakout is a positive sign, traders may need to tread cautiously.
Resistance Zones Threaten Further Gains
Technical indicators suggest that POL’s rally may face strong headwinds soon. On the POL/ETH chart, price action neared a crucial Fibonacci resistance level at $0.0000775.
This level has previously triggered significant rejections, and if history repeats itself, POL could be locked into range-bound movement between $0.0000775 and $0.0000705. Unless buyers step in with volume and conviction, further upside could be limited.
Derivatives and Spot Markets Signal Bearish Sentiment
Despite the price rally, data from Coinalyze revealed a 12.25% jump in Open Interest, taking it to $100.7 million—indicating rising trader activity. However, this increase was accompanied by a negative funding rate of -0.0011, pointing to growing short positions.
Meanwhile, in the spot market, CoinGlass data revealed that over $1.2 million worth of POL was offloaded within 24 hours. If the selling trend continues, POL could face a deeper correction toward its recent support levels.
Also Read: Polygon Rolls Out Heimdall 2.0 in Major PoS Upgrade
Polygon’s recent surge was fueled by Ethereum-driven capital inflows, but the rally could be short-lived. Mounting technical resistance, increasing short positions, and a weakening spot market raise red flags about the sustainability of the uptrend.
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.
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.
