The word on the streets is that a significant number of POL holders are standing at a crossroads as they face potential losses following an unprecedented whale sell-off of 5.64 million Polygon (POL) tokens valued at $2.28 million. Most people are wondering whether it is time for the POL holders to panic.
According to available data, the large-scale investor accumulated the tokens over the last two months after spending a colossal $3.6 million. After selling the tokens to Coinbase, the whale must have incurred a loss of at least $1.32 million, suggesting that POL’s bearish momentum could indicate a change in market sentiment.
There’s everything to Worry About
The recent sell-off has caused panic among POL holders regarding the future price movement of the token, which has recently struggled to maintain a crucial support level. As POL’s bearish momentum seems to gather into a raging storm, investors have questioned what kind of intervention could bring a desirable change to the prevailing situation.
While POL was trading at $0.411 at the time of writing, showing a slight 3.13% gain from the last 24 hours, the price was still below the significant demand level of %0.45, indicating a sustained bearish pressure.
According to experts, POL holders have everything to be worried about, considering the patterns of a descending wedge, which indicates the possibility of more losses unless buyers go out of their way to recapture the higher thresholds. Analysts opine that a more profound correction is bound to happen unless POL can remain above the $0.40 level.
POL’s Bearish Momentum Could Easily Take the Day
Blockchain data shows that 93.51% of POL holders will suffer irreparable damage if there is no intervention, seeing that they purchased their tokens when the price was relatively higher. The data further indicates that only 4.68% of the wallets within the POL ecosystem are in profit, which could indicate a waning confidence among investors. The token is currently encountering resistance between $0.43 and $0.45, and unless the bulls can break the resistance barrier, POL’s bearish Momentum could easily take the day and deepen investors; financial losses.
The number of newly created addresses has plummeted by 58.67%, while active addresses have declined by 44.34% in the past seven days. This sharp reduction signals a diminishing level of user participation, a factor typically associated with bearish price movements.
Retail Investors Are Giving POL A Wide Berth
The dire situation facing POL holders has been exacerbated by what appears to be declining demand for the token, making it harder for any potential recovery to occur. As things stand right now, unless there is an upturn in network activity, POL’s bearish momentum will continue to hold, ensuring that the token doesn’t see appositive price movement.
Despite all the negative sentiment, indications show that transactions involving amounts between $100K and $1 million surged by 620%, indicating that whales or institutional investors are eying the token. However, on the other hand, a decline in transactions below $100 suggests that retail investors are giving POL a wide berth.
Considering the crucial role that retail traders play on the market significantly during market rallies, their reluctance to get involved could further dampen the woes of POL holders. POL could continue its downward trend unless retail investors return to the activity.
Conclusion
As POL holders cross their fingers, hoping for the best, the Polygon market is currently grappling with whale exits, low network activity, and little or no retail engagement. Experts predict that unless the token pushes itself to surpass the $0.45 threshold, POL’s bearish momentum could continue to keep the bulls at bay, with a deeper correction remaining the only probable scenario.
Frequently Asked Questions (FAQs)
Why did Polygon introduce the POL token?
Polygon introduced POL to replace MATIC as part of the firm’s strategy to enhance functionality, including multi-chain staking capabilities and improved network performance.
Did transferring to the POL token affect existing MATIC holders?
Existing MATIC holders automatically transitioned to the POL token and retained similar functionalities, such as staking and paying network fees.
Were there any benefits of the MATIC to POL migration?
According to Polygon, these enhancements resulted in benefits, including enhanced scalability, better security, and potentially improved stability value.
