Polygon price has moved into a local bear market as the recent bull run ended. POL, formerly known as MATIC, was trading at $0.1440 on Monday, down by over 20% from its highest level this year. Still, there are a few reasons why the token will likely rebound once this retracement ends.
Polygon Price Technical Analysis Suggests a Rebound is Possible
The first main reason why Polygon’s price will rebound is its strong technicals. This chart shows that the token rebounded from a low of $0.097 on January 1st and then rebounded to a high of $0.1865.
It is common for a coin in a strong rally to retreat a bit and then resume the bullish trend. One reason for this is that it has likely entered the second phase of the Elliot Wave pattern. This second phase is usually a corrective one and is usually followed by the third one, which is usually the longest one.
POL price may move to this phase now that it has bottomed at the 23.60% Fibonacci Retracement level. Also, it remains above the 50-day Exponential Moving Average (EMA), which is a highly bullish sign in technical analysis.
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Additionally, the current price is along the Major S&R Pivot Point of the Murrey Math Lines tool. Therefore, the most likely scenario is where the token rebounds and initially moves to the year-to-date high of $0.1865. A move above that level will point to more gains, potentially to the psychological level at $0.25.
POL price chart | Source: TradingView
Polygon Network Growth and Token Burns
The other bullish case for the Polygon price is its growing network, fees, and token burns. Data shows that the network had over 175 million transactions, up 8.5% from the same period a month earlier.
This transaction count makes it more active than other layer-2 and layer-1 networks in the industry. For example, Optimism handled over 85 million transactions, while Near Protocol, Sei, and Celo handled 112 million, 70 million, and 42 million, respectively.
Polygon has started to see strong fee growth after the recent Madhuguri upgrade, which boosted its transaction speed to over 1,400 transactions per second (TPS). It also launched the Heimdall upgrade, which was related to the payment industry.
As a result, the network is burning millions of POL tokens a week, making it highly deflationary. Unlike other cryptocurrencies, it does not have any token unlocks, meaning that its circulating supply will continue falling.
Polygon Has Tangible Utility
Meanwhile, unlike other crypto projects, Polygon has tangible use cases, which makes it a major utility token. For example, Polygon powers Polymarket, one of the biggest prediction marketplaces that is used by millions of people a month. Data shows that Polymarket handled over $2.7 billion in volume in the last 30 days.
Polygon is also used by some of the biggest fintech companies globally, including popular names like Stripe, Revolut, Shift4 Payments, and Mastercard. As a result, its stablecoin transaction volume has continued rising in the past few months, a trend that will continue over time.
Polygon has continued to bet on the payment industry, and this month, it acquired Coinme and Sequence, a move that made it a regulated company in the United States. These buyouts were part of its Open Money Stack, which aims to help companies enable seamless and interoperable on-chain stablecoin movement.
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