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Polygon’s liquidity strain: Can POL’s support hold as selling rises?
Published: August 21, 2025
By Olayiwola Dolapo
As the cryptocurrency market continues to experience a bearish sentiment, Polygon (POL) has been no exception. The asset has declined by 6% in the past day and an astonishing 46% over the past year, leaving investors wondering if the support can hold as selling rises.
One of the primary concerns is the liquidity strain faced by POL. According to data from Artemis, a net outflow of approximately $105,900 has been recorded, indicating that investors are bridging their POL and reallocating it into other assets perceived as more profitable. This trend is not limited to on-chain activities alone; off-chain exchanges have also witnessed the same bearish outlook, with $263,000 worth of POL being sold in a single day.
The derivatives market does not paint a rosier picture either, as Open Interest (OI) has decreased by $9.88 million over the past 24 hours. This decline is a clear indication that investors are liquidating their positions and taking profits from previous investments. The cumulative effect of these outflows across all market segments will put downward pressure on POL’s price, leading to further declines in the market.
On-chain activity has also been weak, with weekly active addresses falling to 2.2 million at the time of writing. This decline is concerning as it indicates less demand for the asset, resulting in a reduction of liquidity and further pressure on the market.
Despite this bleak outlook, the chart still suggests that a rally remains possible. A recent price drop has caused POL to fall into a key demand zone, between 0.2318 and 0.2264. This zone has previously triggered rallies for POL three times since August, indicating that there may be a chance of recovery if sentiment can shift.
However, this support level could potentially weaken after repeated tests, which could mean there are not enough buy orders to counter the ongoing sell-offs.
Source: ambcrypto.com
