Polygon price continued its steep reversal this week as demand for cryptocurrencies waned. POL token slumped to a low of $0.1270, its lowest level since January 8, and 32% below the year-to-date high of $0.185. Still, the ongoing network growth and accumulation points to a rebound.
Polygon Network Growth and Accumulation
POL price has remained under pressure recently despite the fact that investors have continued to accumulate it this year. As the X post below shows, Polygon has led the market in terms of accumulation in the last three months. In most cases, this level of accumulation leads to a rebound over time.
Polygon has become one of the most active networks in the crypto industry in the past few months, partly because of key partnerships with companies like Polymarket, Revolut, Shift4 Payments, and Mastercard. It recently partnered with Toku, a payroll company bringing over $1 billion in volume to the network annually.
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Data shows that the volume of payment transactions in the network jumped by over 130% YoY in January.
Meanwhile, the number of transactions and fees in the network has continued rising in the past few months. It handled over 173 million transactions in the last 30 days as its fees soared by 466% to $3.23 million.
The soaring fees in the network is important as it leads to more token burns. Data shows that the network has already burned 19.78 million POL tokens this year, much higher than the 13.2 million POL tokens that were issued.
Polygon’s volume in the decentralized exchange (DEX) industry has held steady in the past few months. The network handled over $5 billion in transactions this month, a figure that may cross the $5.7 billion it handled in December last year. The top DEX networks in Polygon are Polymarket, Uniswap, QuickSwap, and DODO.
Polygon Price Technical Analysis
The daily timeframe chart shows that the POL price has pulled back in the past few weeks, moving from a high of $0.1865 to the current $0.1270.
A closer look shows that the token has formed a falling wedge pattern, which often leads to a strong bullish breakout.
Also, the Average Directional Index (ADX) has continued falling, moving to a low of 28, its lowest level since October last year. A falling ADX indicator is a sign that the downtrend is losing steam.
Therefore, the most likely scenario is where the token rebounds soon, potentially to the key resistance level at $0.1865, up by 46% from the current level.
