In the ever-changing landscape of the cryptocurrency market, Polygon (POL) seems to be quietly becoming a potential stock for the next wave of significant gains. Recently, whale investors have aggressively purchased 59 million POL tokens by cleverly utilizing the price pullback window. This operation occurred against the backdrop of a warming altcoin season, suggesting that POL may be experiencing an 'undervalued' phase, and its potential for upward movement is exciting.
However, does this move by whales indicate that POL's value is truly undervalued by the market? Or is it simply a brief speculative behavior amid market fluctuations? Let's analyze this further.
Whale Influx: 'Discount Window' During Price Pullbacks.
In the past 48 hours, whales have seized the opportunity of price pullbacks, accumulating POL tokens worth approximately $59 million. Although this only represents a small portion of the total supply of over 10 billion POL tokens, this concentrated buying action has indeed sent a strong signal to the market: large funds are optimistic about the future price potential of POL.
However, this also raises a question: Is the current valuation reasonable? Based on the whale activity, is the market truly underestimating POL?
Is POL undervalued? MVRV data reveals market signals.
To answer this question, we can start with the Market Value to Realized Value (MVRV) ratio. Data shows that the MVRV ratios for the past 30 days and 180 days are +35% and +44%, respectively. This indicates that investors holding POL over the past few months have considerable unrealized profits, and even after a 20% pullback, their paper gains remain in positive territory.
This situation seems to suggest that short-term holders may choose to sell to lock in profits, which could create some pressure on POL's upward movement. However, it's worth noting that short-term holders are not the main force in the market, and the true market potential has not yet been fully released.
Most holders are still at a loss: Upside potential is underestimated.
According to data from IntoTheBlock, although some investors have already achieved double-digit unrealized profits, this group only accounts for 10% of POL's total holders. In other words, more than 85% of POL holders (over 500,000 addresses) are still at a loss, and less than 4% of holders (around 23,000 addresses) are currently at the breakeven point. This means that despite the rise in POL's price, the majority of holders have not yet broken even.
This also means that once the price of POL rises further, many investors who are currently at a loss may choose to sell to break even or even take small profits. This could release a significant amount of market demand, further driving up the price. If this scenario materializes, the upward potential of POL will be further unleashed.
Technical Analysis: POL has significant room for growth.
From a technical standpoint, POL's price still has a significant upside, especially given the low On-Balance Volume (OBV). Previously, AMBCrypto mentioned that breaking above $0.6 could be a key point for accelerating price recovery. If POL can break above $0.8, it will align with the three-month price range at the beginning of 2024 and the 50%-61.8% Fibonacci retracement levels, which could be a strong signal for the continuation of the upward trend.
What’s more noteworthy is that if POL's price can break and stabilize above the high point of $1.2 (the historical peak in March), the potential upside will be close to 160%. This potential compels a reevaluation of POL's true value.
Conclusion: POL is entering a window of explosive growth.
In summary, POL is currently in a very delicate yet highly potential phase. The collective entry of whales, positive signals from MVRV data, and the fact that most investors have not yet broken even in the market structure all suggest that POL may be undervalued, and there could be vast upside potential in the future.
For those investors who are still watching from the sidelines, now may be the best time to enter. For those who already hold, it may be worth exercising a bit more patience as we wait for the next wave of upward momentum.
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