Key Insights
- Polygon price has formed a giant bearish flag pattern.
- It has also formed a rising wedge pattern on the daily chart.
- The number of transactions and stablecoin supply has dropped.
Polygon price has remained in a tight range since March this year and has missed the recent crypto market rally. The POL token was trading at $0.2400 today, October 9, down 70% from its highest point in November last year.
Polygon Price Prediction: Technicals Points to a Drop
The daily timeframe chart indicates that the POL price has remained within a narrow range over the past few months. It has been inside the ascending channel whose upper side connects the highest levels in May, and September. The lower side of the channel links the lowest points in April, June, July, and September.
Polygon price has remained alongside the 50-day and 100-day Exponential Moving Averages (EMA), while the Average True Range (ATR) indicator has slumped. These indicators suggest that the token’s volatility has decreased significantly over the past few months.
Polygon’s volume in the spot and futures market has continued to drop in the recent past. Most notably, there are signs that the coin has slowly formed a bearish flag pattern. This pattern consists of a vertical line and a channel, resembling an inverted flag.
In this case, the upper flagpole connects the highest point in November last year with the lowest point in April.
Additionally, there are indications that the Polygon price has also formed a rising wedge pattern, characterised by two converging trendlines that are ascending.
It has also formed a small bearish flag pattern inside the falling flag pattern. Therefore, the most likely scenario is where the Polygon price stages a strong bearish breakdown, potentially to the year-to-date low of $0.1487, its lowest level in April this year. This price is about 40% from the current level.
On the flip side, a move above the key resistance level at $0.2980, its highest level in September, will invalidate the bearish outlook and point to more gains, potentially to the psychological level at $0.50
Key Polygon Metrics are Deteriorating
The bearish case of the Polygon token price is also based on the deteriorating ecosystem metrics.
One major reason why Polygon has continued to drop is that the layer-2 industry, which it dominated a few years ago has now become highly saturated. As a result, it has continued to lose market share among other networks like Base Blockchain and Arbitrum, which have become the biggest players in the sector.
For example, data compiled by DeFi Llama shows that there are 730 dApps on the Base Blockchain, while Polygon has 710, a figure that is no longer growing. Arbitrum has over 970 applications in the DeFi industry.
Meanwhile, the Base has a Total Value Locked (TVL) of $7.7 billion and a bridged TVL of almost $20 billion, while Arbitrum has over $6.1 billion. In contrast, Polygon has a DeFi TVL of over $1.27 billion and a bridged TVL of $1.27 billion.
Worse, Polygon’s metrics are no longer improving. The TVL has dropped to $1.27 billion from the year-to-date high of $1.35 billion. It is still unclear whether the recently launched Rio upgrade will lead to more activity.
Most notably, Polygon’s performance in the stablecoin market is deteriorating, meaning that it is not benefiting from the recently signed GENIUS Act. The stablecoin supply has dropped by 18% in the last 30 days to $2.4 billion. Stablecoin transactions in the network fell by 22% in the same period.
These fundamentals likely explains why Polygon’s demand has continued falling this year. CoinGlass data shows that the futures open interest has dropped to $133 million from the year-to-date high of $186 million. Falling open interest is a sign of weak demand and liquidity.
The same is happening in the spot market, where Polygon’s daily volume has lumped to just $90 million. This is a tiny amount for a coin valued at over $2.5 billion. At its peak, Polygon had billions in volume, which means that the demand has plunged.
Crispus is a distinguished Financial Analyst at, bringing over 12 years of expertise in cryptocurrency markets, specializing in Bitcoin and altcoins. Renowned for his sharp insights at the nexus of market trends and breaking news, Crispus delivers actionable analysis to empower investors. His work is prominently featured across leading platforms, including BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com, cementing his reputation as a trusted voice in the financial world.
