Polygon Price Rallies 50% Amid On-Chain Demand, But Will it Last?

POL, the Polygon community’s native token, has surged greater than 50% in every week. The POL worth transfer didn’t come from a single spike or headline-driven burst. Instead, it was backed by regular on-chain demand throughout the community.

As worth pauses close to current highs, the main focus shifts. This is now not about upside momentum alone. The key query now could be whether or not POL strikes right into a wholesome consolidation or a deeper correction.

Steady On-Chain Demand Holds as Momentum Starts to Cool

On-chain information exhibits Polygon has maintained steady usage all through early January. Daily distinctive addresses have stayed agency, and transaction exercise has continued to rise in step with different main EVM networks. This factors to constant community demand quite than short-term hypothesis.

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That regular on-chain demand helps clarify why POL rallied so strongly. Users are usually not leaving the community, and exercise has not pale after the worth bounce. This varieties a stable base beneath the transfer.

However, momentum indicators are beginning to diverge. The Relative Strength Index, or RSI, measures worth momentum by evaluating current positive aspects to current losses. When RSI strikes larger whereas worth fails to observe, it suggests momentum is
not translating into worth follow-through.

Between mid-October and early January, POL’s worth is forming decrease highs whereas RSI is printing larger highs. This setup is called a hidden bearish divergence. It doesn’t sign panic or a right away breakdown. Instead, it factors to cooling power and rising pullback threat after a robust run.

This divergence solely confirms if the subsequent worth candle varieties beneath $0.174. For now, it merely warns that the rally might have time to interrupt.

Whales Reduce Exposure as Retail Keeps Buying

Holder conduct helps clarify how this reset may play out.

Large holders have been lowering publicity forward of the current worth pause. Wallets holding between 100 million and 1 billion POL started trimming balances round January 3. Since then, their holdings have fallen from roughly 743.6 million POL to about 708.3 million POL.

The subsequent whale tier, holding between 10 million and 100 million POL, adopted later. This group began lowering balances round January 7, dropping from about 571.7 million POL to roughly 563.0 million POL.

At the identical time, smaller holders have moved in the wrong way. Retail cohorts, usually holding between 10 and 10,000 POL, have steadily elevated their balances all through the rally and into the present pause.

This cut up issues. Whales look like responding to momentum cooling and chart indicators. Retail contributors, alternatively, could also be reacting to seen on-chain demand and rising community exercise.

That mixture usually results in consolidation. It may also create a deeper cooldown threat if sentiment-driven shopping for runs into fading momentum.

POL Price Levels That Define Consolidation or Deeper Correction

POL price action now decides the result. If POL holds above $0.155, the transfer is prone to keep a consolidation. This degree has acted as a key assist zone in early November, and holding it would permit the market to soak up promoting with out breaking construction.

A clear transfer again above $0.188 would ease bearish momentum indicators. A stronger shut above $0.213 would totally invalidate the divergence and reopen the trail towards $0.253.

On the draw back, a sustained break under $0.155 would shift the setup towards a reset. That opens room towards $0.142, with a deeper extension potential close to $0.098 if promoting accelerates.

For now, POL remains supported by steady on-chain demand.

The rally will not be breaking, however momentum is cooling, and huge holders are stepping again. Whether this turns into a easy consolidation or a deeper dip relies on how the worth behaves round assist.

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