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