TLDR
Polygon (POL) sees 11% daily gain reaching $0.655, though still down 7% weekly, with technical analysis showing a potential bull flag formation suggesting continued upward momentum
Network metrics show mixed signals – DApp activity declined 8% in volume and 10% in active wallets, while DeFi TVL reached monthly high of $1.195 billion
Trading data reveals cautious sentiment with long/short ratio at 0.90 and 52% of traders maintaining short positions
Key price resistance identified between $0.67-$0.69 where over 10,270 addresses hold positions
Technical indicators like MFI and MACD suggest increasing buying pressure, though trading volumes remain relatively low
Polygon’s native token POL has recorded an 11% price increase in the last 24 hours, trading at $0.655 as of December 13, 2024. The recovery comes after a week of downward pressure that left the token down 7% over the seven-day period.
Technical analysis of POL’s price action on the four-hour timeframe reveals the formation of a bull flag pattern, typically considered a continuation pattern that forms during an uptrend. This structure emerged following POL’s strong rally in late November and subsequent consolidation in early December.
The current price movement shows increasing momentum on the buying side, as indicated by the Money Flow Index (MFI) which has risen to 62. This technical indicator suggests growing capital inflow into POL, though trading volumes remain subdued compared to previous weeks.
Further technical confirmation comes from the Moving Average Convergence Divergence (MACD) indicator, which displays green histogram bars, indicating a shift in momentum toward buyers. The MACD line’s upward trajectory suggests potential for additional gains if it crosses above the signal line.
On-chain metrics provide insight into key price levels that could influence POL’s near-term movement. Data from IntoTheBlock shows approximately 10,000 addresses accumulated POL between $0.65 and $0.67, establishing a support zone at current prices.
A more substantial cluster of holders exists between $0.67 and $0.69, where 10,270 addresses hold over 31 million POL tokens. This zone may present resistance as these holders could seek to exit positions once reaching profitability.
Network activity metrics present a mixed picture for Polygon’s ecosystem. DappRadar data indicates a decline in network usage, with seven-day decentralized application (dApp) volumes falling 8% to $2.41 billion. The number of unique active wallets also decreased by 10% during this period.
However, Polygon’s decentralized finance (DeFi) sector shows strength, with Total Value Locked (TVL) reaching $1.195 billion according to DeFiLlama. This marks the highest TVL figure for the network in over a month, suggesting growing confidence in Polygon’s DeFi protocols.
Trading sentiment data reveals cautious positioning among market participants. The long/short ratio, which measures the balance between bullish and bearish traders, currently stands at 0.90 after reaching a monthly low of 0.79 on December 9.
The current ratio indicates that 52% of traders maintain short positions, suggesting skepticism about POL’s ability to sustain its recent gains. This represents a modest improvement from earlier bearish sentiment but still reflects overall caution.
Technical support for POL appears strongest at the $0.65 level, where current buying activity has concentrated. A break below this zone could trigger increased selling pressure from recent buyers.
The $0.67 to $0.69 range represents a critical resistance zone, with a large number of holders potentially looking to sell. Breaking above this level could require sustained buying pressure and increased trading volumes.
Volume analysis shows relatively low trading activity despite the recent price increase. The volume histogram displays minimal fluctuations, suggesting limited conviction behind the current move.
The MACD indicator on the four-hour timeframe shows improving momentum, with the histogram bars turning green and trending upward. This technical setup typically precedes more substantial price movements, though confirmation through increased volume would strengthen the signal.
Looking at broader network metrics, Polygon’s ecosystem displays resilience in its DeFi sector despite the recent decline in overall dApp activity. The contrasting trends between DeFi growth and general network usage suggest evolving user behavior on the platform.
Trading data indicates a gradual shift in market sentiment from strongly bearish to more neutral positioning. The long/short ratio’s recovery from its monthly low reflects this changing outlook, though traders remain predominantly cautious.
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