- POL price is consolidating within a descending triangle, with a potential 40% breakout looming.
- Positive numbers, including rising active addresses and declining foreign exchange reserves, favor a bullish outlook.
Polygon [POL] was approaching a pivotal moment as price action consolidated within a descending triangle on the 4-hour chart. The range between $0.47 and $0.41 remains a critical zone, with bulls and bears battling for control.
At the time of writing, POL was trading at $0.4505, reflecting a small decline of 0.02% in the last 24 hours. Therefore, a breakout in either direction will likely determine the token’s next major move. Will the bulls overcome resistance to spark a rally, or will the bears cut prices?
Is the POL price ready to break the supply zone?
POL price is trapped in a descending triangle, repeatedly testing the $0.47 resistance level. The token is making another attempt to break above this supply zone, which could set the stage for a strong upward move.
A breakout above $0.47 would signal bullish momentum, with a potential 40% rally towards $0.63. On the other hand, if POL fails to hold above $0.41, it could face downside pressure and retest lower support levels.
This crucial battle will determine the immediate trajectory of the token.
Source: TradingView
What does the increase in the number of active addresses indicate?
The number of active addresses has increased by 1.17% in the past 24 hours. This increase reflects increased user engagement, indicating renewed interest in the network.
Rising active addresses often indicate growing demand and potential market momentum. If this trend continues, it could support a bullish breakout. However, sustained activity is essential to maintain long-term growth and price stability.
Source: CryptoQuant
Does the number of transactions confirm market activity?
POL’s number of transactions increased by 1.3%, for a total of 2,886,000 transactions in the last 24 hours. This increase indicates consistent network usage and growing user participation.
Additionally, higher transaction activity often indicates greater adoption, which could support bullish sentiment. If transaction volumes remain stable or continue to grow, they could increase the likelihood of a breakout above the key resistance level.
Source: CryptoQuant
Why is the foreign exchange reserve decreasing?
The foreign exchange reserve decreased by 1.23% and now stands at 56.9 million. A decreasing reserve indicates that there are fewer tokens available for trading on exchanges, possibly indicating accumulation by long-term holders.
Lower reserves often lead to reduced selling pressure, creating favorable conditions for a price increase. However, if demand weakens, this accumulation trend may not translate into immediate upward momentum.
Source: CryptoQuant
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Conclusion: Will POL Rise or Sink?
Polygon’s price action is at a critical juncture. The increase in the number of active addresses and number of transactions, coupled with declining foreign exchange reserves, indicates strong bullish potential.
If the bulls break above the resistance at $0.47, a rally towards $0.63 becomes very likely. However, failure to maintain this level could lead to bearish dominance and downward movement. For the time being, all eyes are on the supply zone.