Polygon Faces Renewed Sell-Off Amid $105,900 On-Chain Outflows and Declining Demand

Polygon (POL) is experiencing renewed downward pressure amid persistent liquidity outflows and declining on-chain activity. Over the past year, the token has lost 46% of its value, with recent data showing a continued erosion of demand and participation on the network [1]. On-chain analytics provider Artemis reported a net on-chain outflow of approximately $105,900, signaling ongoing capital reallocation away from POL [1]. Concurrently, spot exchanges have recorded roughly $263,000 in sales of the token over the past 24 hours, compounding downward momentum [1].

Derivatives markets also reflect a bearish trend. Open Interest has declined, with nearly $9.88 million in derivative positions closed in the past day, reducing speculative support for the asset [1]. This aligns with broader market sentiment, as liquidity outflows both on-chain and off-chain intensify, further weakening confidence among traders and investors [1].

On-chain activity remains subdued, with weekly active addresses for POL falling to around 2.2 million. This represents a marked decline in user engagement and suggests that the token’s utility is being challenged [1]. New user liquidity has also dropped to approximately 99,000, indicating limited fresh demand and reduced network adoption [1]. These metrics are critical as they reflect the underlying health of the blockchain ecosystem and can serve as leading indicators for price direction [1].

From a technical perspective, POL is currently testing a key demand zone between $0.2318 and $0.2264, an area that has historically supported price recovery on three occasions since August 2025 [1]. Analysts suggest that if buying interest returns, the token could experience a short-term rebound. However, repeated tests of this support level may exhaust buyer momentum, potentially leading to a breakdown and further declines if selling pressure persists [1].

The immediate outlook for POL remains bearish due to continued outflows and weak fundamentals. While the tested demand zone offers a glimmer of hope for a near-term bounce, sustained selling pressure and declining on-chain activity increase the likelihood of further downside [1]. Investors and traders are advised to closely monitor net flows, active addresses, and Open Interest as key indicators of potential turning points [1].

Sources:

[1] Polygon (POL) Sees Liquidity Outflows and Falling Active Addresses, May Find Support in Demand Zone August 21, 2025 (https://en.coinotag.com/polygon-pol-sees-liquidity-outflows-and-falling-active-addresses-may-find-support-in-demand-zone/)