Struggle for Polygon continues with the declining network health amid Ethereum’s failure to start a bull run. Will this lead the POL price to face a crushing blow to $0.23?
By Vishal Dixit
Edited by Julia Sakovich
Updated
3 mins read
With a recovery in BTC price BTC $94 973 24h volatility: 1.5% Market cap: $1.89 T Vol. 24h: $31.79 B crossing over the $105,000 mark, Polygon POL $0.24 24h volatility: 1.4% Market cap: $2.08 B Vol. 24h: $120.90 M stands on thin ice. Over the past 24 hours, Polygon has increased by 2.09% to reach a market price of $0.40.
However, the increased volatility and the stunted network load warn of an intense correction if the situation remains the same.
In the daily price chart, the Polygon price trend reveals a stronger pullback phase in motion, starting from the recent swing high of $0.76. Polygon price recently tested a low of $0.3825, marking a near 50% decline within two months.
However, a swift reversal from $0.3825 results in a Morning Star pattern with an intraday gain of 3.27%. The ongoing pullback comes after a massive 163% rise during the November rally, when POL token price surged from $0.2918 to a peak of $0.7675.
Using the trend-based Fibonacci extension tool, the ongoing pullback now tests the crucial 23.6% Fibonacci support level. As Polygon avoids a close below this support level, a bullish reversal with the Morning Star pattern hints at a potential recovery run.
The bullish reversal comes from a local support trendline that creates a falling wedge pattern. Hence, the bullish reversal in Polygon is likely to test the overhead resistance trendline near the $0.46 mark.
In the case of a trendline breakout, Polygon’s potential extends to the 78.6% Fibonacci level at $0.6238. However, as the broader market remains volatile, closing under the 23.6% Fibonacci level at $0.39 will mark a massive bearish move.
In such a case, the Polygon price could decline by 28% to reach the $0.2916 support level.
Adding to the downside risk, Ali Martinez, an independent crypto analyst, has highlighted the possibility of a massive crash in Polygon.
#Polygon $POL could be on the verge of a 44% correction to $0.23! pic.twitter.com/QLg7GkmfXX
— Ali (@ali_charts) January 29, 2025
Suggesting a descending triangle pattern in the 4-hour chart, Polygon has broken under the crucial support at $0.41. Based on Fibonacci levels, Ali suggests a potential pullback of 40% to $0.23.
Amid the rising bearish pressure over the Polygon price trend, the network faces intense heat. The Total Value Locked (TVL) on the Polygon network has declined to $841.4 million, marking a significant drop from its $1.337 billion peak in November 2024.
Furthermore, large transactions over the Polygon network have subsided in value. According to IntoTheBlock data, the value of the large transactions on January 29 stood at $62 million, marking a massive surge compared to $4.41 million on January 28.
However, the overall trend over the past three months reflects the underperformance of the token. The seven-day high and the three-month high stood at $217.56 million, while the six-month high reached $2.06 billion.
Compared to historical price trends, large transaction volume has maintained a declining trend since the 2021 bull market.
In conclusion, with Polygon standing at a make-or-break level, traders should closely watch the $0.39 support zone for the next move.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Vishal, a Bachelor of Science graduate, began his journey in the crypto space during the 2021 bull run and has since navigated the subsequent market winter. With a strong technical background, he is dedicated to delivering insightful articles rich in technical details, empowering readers to make well-informed decisions.
