Polygon's POL token drops 9.5% but technical indicators signal potential 78% rebound

Polygon’s POL token has declined 9.5% in 24 hours, trading at $0.225 with a market cap of $2 billion, extending its three-day downtrend amid profit-taking following recent gains alongside Bitcoin and Ethereum [1]. This follows a 13.46% drop from its July peak, reflecting broader market caution. However, technical and on-chain indicators suggest a potential reversal, with a double-bottom pattern and golden cross forming on the daily chart. The pattern, anchored near $0.1637, projects a target of $0.393—a 78% rise from current levels—if bulls break above the $0.2768 neckline [1]. A breakdown below $0.20, however, would invalidate the bullish case.

On-chain activity reinforces optimism. Whale accumulation has surged 33% in 30 days, with large holders now controlling 1.56 million POL tokens, while exchange balances fell 4.5% to 1.23 billion tokens, signaling reduced short-term selling pressure [1]. Meanwhile, stablecoin market capitalization on Polygon climbed 8% to $2.9 billion, per DeFiLlama, indicating growing liquidity and DeFi adoption [2]. This aligns with strategic developments in the ecosystem, including Polygon’s role as the blockchain infrastructure for BeToken, Spain’s first EU-regulated on-chain security token offering. The initiative could expand real-world asset tokenization in Europe, potentially boosting stablecoin activity and demand for POL [1].

Regulatory progress also supports a positive outlook. Polymarket, a prediction market built on Polygon, is set to resume operations in the U.S. after acquiring a CFTC-licensed derivatives exchange, following a 2022 investigation that blocked U.S. users [1]. Compliance could drive transaction volume and user engagement, enhancing Polygon’s visibility.

Technical analysts note the confluence of bullish signals: the double-bottom pattern, golden cross, and whale accumulation, which together suggest a potential short-term rebound. However, the projected $0.393 target remains conditional on sustained buying pressure and confirmation of the neckline breakout. A drop below $0.20 would trigger renewed bearish momentum, emphasizing the need for caution.

While POL remains 56% below its year-to-date high, ecosystem advancements and favorable on-chain dynamics present a compelling case for recovery. The coming weeks will likely determine whether these signals translate into a sustained rally, with broader crypto market trends and regulatory developments playing critical roles [1].

Source: [1] [Polygon is down today, but charts say POL is gearing up for a rally] [https://crypto.news/polygon-is-down-today-but-charts-say-pol-is-gearing-up-for-a-rally/] [2] [DeFiLlama stablecoin data] [https://defillama.com] [3] [Nansen whale holdings] [https://nansen.ai]