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POL’s extended downtrend – Is there ANY upside in the short-term for its price?
As of December 24th, Polygon’s native token, POL, has continued to plummet, demonstrating no signs of a reversal in the near future. This prolonged decline has led to significant losses for investors who had previously held onto their positions.
At press time, the asset was trading within a broader bearish structure, despite some market pressure. A sharp hike in selling activity has heightened bearish momentum, with further declines possible in the short term.
In the past week alone, POL has dropped by 18.90%, with a stark decline of 1.15% over the last 24 hours. This relentless downward movement solidifies the bears’ grip on the market.
Recent analysis suggests that POL’s extended downtrend may be far from over. In fact, it is likely poised for even more significant losses in the short term.
Despite being situated within a descending channel pattern, the price has stalled at this point, displaying no substantial upward momentum. This lack of support could signify the beginning of an extended decline.
Further examination revealed that current on-chain data may undermine any hopes of a rally, as exchange reserves have surged by around 2 million, indicating the potential for increased selling pressure in the future. Typically, such movements precede sell-offs, which could lead to further declines in the POL price.
The availability of POL on exchanges has significantly risen, with over 57 million units now held in reserve. This uptick usually indicates that traders are moving their holdings back onto exchanges, boosting supply. Such a movement typically precedes significant sell-offs, potentially driving the asset’s value downward on the charts.
Notably, the number of active addresses has continued to decline, resulting in only 1,231 addresses remaining. This sharp drop signifies diminished interest in the asset and is often linked to waning investor confidence.
Additionally, data from IntoTheBlock highlights a drastic reduction in the worth of POL being traded, further reinforcing the notion that market activity is dwindling.
Moreover, trader sentiment has shifted towards short positions as Open Interest fell by 2.60%, resulting in $88.30 million in closed contracts. This decline signifies an increase in traders opting to close their long positions and transition into shorts, further fueling downward pressure on the asset’s value.
Lastly, liquidation data highlighted a clear advantage for short traders, as more long contracts were liquidated than short contracts over the last 24 hours. Notably, $225,670 worth of long contracts have been closed compared to just $58,380 in shorts.
In light of these findings, it appears unlikely that there will be any significant upside in the short term for POL’s price.
Source: ambcrypto.com
