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Polygon (POL) Nears Breakout as Whale Accumulation Tops $80M

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Victor Olanrewaju
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Key Takeaways

  • Addresses holding between 1 million and 10 million POL have purchased nearly 195 million since October.
  • POL’s price could rise past the descending trendline, potentially pushing above the $0.63 resistance.
  • If the token sustains bullish momentum, this analysis reveals the potential POL target in the short term.

Between Nov. 5 and Dec. 3, POL, the Polygon Ecosystem Token, rallied from $0.29 to $0.77. Since reaching that height, POL’s price action has been underwhelming, dropping recently to $0.41.

Despite the decline, the altcoin has experienced a surge in whale activity.

Here is what the recent interaction with these key stakeholders could mean for the token’s price going forward.

POL Whales Have Been Buying for Three Months

POL migrated from MATIC on Sep. 4, 2024, as the Polygon community expected the transition to be bullish. However, it turned out to be the opposite as the altcoin’s value plunged from $0.45 to $0.29 within two months.

But amid the decline and uptrend between November and December, on-chain data from Santiment shows that whales were buying the dip. Specifically, the balance of POL held by addresses owning between 1 million and 10 million tokens stood at 192 million on Oct. 21.

As of this writing, that figure has increased to 386 million, indicating that whales accumulated about 200 million tokens within the last three months. This accumulation is worth over $80 million at the current market value.

Polygon whales exert buying pressure on POL token
POL Whales Balance | Credit: Santiment 

Should these whales continue to snap up more tokens, this could exert upward pressure on POL’s price.

The Token Forms Bullish Divergence

From a technical perspective, the daily chart shows that POL’s price has been trapped in a descending triangle since November.

A descending triangle is a pattern formed by a series of lower highs and a horizontal lower support level, indicating a potential downtrend continuation. However, in POL’s case, it has bounced off the support line at $0.44.

Following this bounce, the Chaikin Money Flow (CMF), which tracks the level of accumulation and distribution, has risen above the signal line. This break above the zero midpoint indicates a bullish divergence for POL and validates whales’ accumulation.

If the CMF reading remains positive, POL’s price might jump above the resistance at $0.52. This potential breakout could also lead the token to rise above $0.63, which has been held for 35 days since Dec. 12.

Polygon POL token forms bullish divergence
POL/USD Daily Chart | Credit: TradingView 

POL Price Prediction: Time to Reclaim $0.69?

On the 4-hour chart, technical indicators also hint at a bullish trend. For instance, the 12 EMA (blue) on the Moving Average Convergence Divergence (MACD) has crossed above the 26 EMA (orange).

This crossover, alongside the positive reading of the MACD, indicates that momentum around POL remains bullish. In addition, the Relative Strength Index (RSI) in the mentioned timeframe has climbed past the neutral region.

If this trend continues, POL’s price will likely rise to the 0.768 Fibonacci retracement level at $0.69, above the 35-day resistance. A highly bullish scenario could see the token’s value surge retest $0.77.

POL price potential recovery and bullish momentum
POL/USD 4-Hour Chart | Credit: TradingView

However, if POL struggles to breach the resistance situated at the 0.618 Fib level, this forecast might not happen. In that scenario, the token could slide to $0.41.

Another factor that could affect the price action is Ethereum (ETH), as it shares a strong correlation with it.

Should ETH’s price slide below $3,000, the bullish prediction might be invalidated, and POL could experience a severe correction.

Disclaimer: The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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Victor Olanrewaju

Victor is a reporter at CCN. Currently residing in Lagos, Nigeria, Victor focuses on writing news and providing readers with on-chain and technical analysis. Before he joined CCN, he worked as an analyst at BeInCrypto and AMBCrypto. He published several pieces at these outlets detailing investor behavior and analyzing price action across different cryptocurrencies. Victor holds a Bachelor's degree in Physics from the University of Ibadan. With his background, he finds it seamless to break down technical terms into simpler words while keeping readers engaged.
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