Polygon Trading Volume Nears $100 Billion Amid Network Activity Decline and Stock Price Consolidation

Polygon, a prominent player in the cryptocurrency ecosystem, is on the brink of achieving a significant milestone as it approaches $100 billion in trading volume. This achievement underscores its growing importance within the crypto market. However, despite these impressive figures, there are indications of a potential consolidation phase, which raises questions about the sustainability of its recent growth.

Key metrics suggest that while the trading volume is high, the network activity and engagement are showing signs of decline. For instance, the number of new addresses on the Polygon network has decreased by 13.43%, and active addresses have dropped by 8.74% over the past week. This downward trend in network activity is a cause for concern, as it signals a potential slowdown in adoption and engagement within the network.

Furthermore, the transaction statistics reveal a slowdown in on-chain activity. The volume of transactions in the $0.00 to $1.00 range has decreased by 12.63%, while transactions within the $1.00-$10.00 range have fallen by 31.33%. This decline in smaller transactions, which typically indicate regular network engagement, raises concerns about the overall activity level within the network. However, larger transactions have seen a more moderate decline, suggesting that some high-value investors remain active.

On the other hand, there are positive signals as well. Polygon’s exchange reserves have decreased by 1.05% in the past 24 hours, which typically indicates less selling pressure. Fewer coins available for liquidation on exchanges suggest a more stable market environment with less immediate downward pressure on the price. This decrease in reserves could also imply that holders are less likely to sell, possibly anticipating a price recovery.

At the time of writing, POL was trading at $0.2422, reflecting a modest 0.46% increase over the last 24 hours. The price recently broke below a key support level and is currently consolidating within a descending symmetrical triangle. The $0.2294 support zone is crucial to watch. If it holds, a rebound towards the $0.3051 resistance level is plausible. The Relative Strength Index (RSI) sat at 34.33, indicating that the asset is in the oversold zone, suggesting a potential reversal may be on the horizon. However, if the