Between November 5 and December 3, 2024, Polygon’s new ecosystem token, POL, saw an impressive rally, rising from $0.29 to $0.77. However, since then, the token’s price has dropped back to $0.41, leaving many investors wondering about its future. Despite this decline, whale activity surrounding POL has surged, and key on-chain data suggests a potential for price recovery.
POL’s Whale Activity: Accumulating for Three Months
POL migrated from MATIC on September 4, 2024, in what was expected to be a bullish transition for the token. However, the reality was far from optimistic, as POL’s value dropped significantly from $0.45 to $0.29 within two months.
Despite this, data from Santiment reveals that whales, holding between 1 million and 10 million tokens, began buying the dip. On October 21, these addresses held 192 million POL tokens, a figure that has now surged to 386 million. This accumulation, valued at over $80 million at current market prices, signals strong bullish sentiment among whales, which could exert upward pressure on POL’s price.
Technical Analysis: Bullish Divergence Emerging
From a technical perspective, POL has been trapped in a descending triangle pattern since November, typically indicating a continuation of a downtrend. However, recent price action shows POL bouncing off the support line at $0.44. Alongside this, the Chaikin Money Flow (CMF), which tracks accumulation, has risen above its signal line, suggesting bullish divergence and confirming whale accumulation.
If this trend continues, POL could break through the resistance at $0.52 and potentially reach $0.63, where it has faced resistance since December 12. A breakout beyond this level could set POL on track to retest its previous high of $0.77.
Price Prediction: Can POL Reclaim $0.69?
Looking at the 4-hour chart, the technical indicators suggest a bullish outlook. The 12 EMA (blue) crossing above the 26 EMA (orange) on the MACD, along with a rising Relative Strength Index (RSI), points to continued bullish momentum. If this positive trend persists, POL could reach the 0.768 Fibonacci retracement level of $0.69, breaking above its 35-day resistance. However, failure to breach this level could see POL slipping back to $0.41.
Ethereum’s (ETH) performance also plays a critical role in POL’s price action. Should ETH’s price fall below $3,000, the bullish outlook for POL may be invalidated, leading to potential downside risks.
Also Read: Polygon (POL) Soars 426% in Network Activity – Will It Break $0.53 Resistance?
In conclusion, POL’s whale activity and positive technical indicators suggest that the token could experience a price rebound if the momentum continues. However, market conditions and ETH’s performance will be key factors influencing its future trajectory.
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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