- Whales upsized their POL long positions amid the latest 20% discount.
- But is POL undervalued to warrant such additional bids?
As a seasoned researcher with over a decade of experience in the cryptosphere, I have witnessed countless bull and bear markets. The recent moves by the whales to amass POL tokens at a 20% discount have piqued my curiosity. While it’s true that these whales have made sizeable bids, the question remains: Is POL undervalued given its current valuation and profitability?
In the last 48 hours, large investors (or “whales”) using Polygon [POL] seized the opportunity presented by the price drop to acquire approximately 59 million POL tokens. This action was taken during a period when there has been a surge in momentum for altcoins across all sectors, suggesting an ‘altcoin season’ is underway.
As a researcher delving into Polygon’s (POL) distribution, it’s crucial to highlight that the recent whale bid, roughly amounting to 60 million POL, represents a minimal fraction compared to the staggering total supply exceeding 10 billion POL.
However, does the existing evaluation and profit margin align with the substantial growth prospects that these big investors anticipate?
Is POL undervalued?
According to the Market Value to Realized Value (MVRV) ratio, it showed a favorable outlook with an MVRV of 35% over the past 30 days and 44% for a longer period of 180 days.
This meant investors who held POL for the past month or six months had +30% in unrealized profit.
Even a 20% decline in the market didn’t affect their potential profits yet, implying they might decide to sell to realize those profits.
If short-term investors choose to cash out their profits in this situation, the growth potential for POL might be restricted. Yet, a more detailed examination of profitability among POL’s locations revealed a contrasting perspective.
Although brief periods showed substantial gains for short-term investors, as per IntoTheBlock’s findings, these individuals represented only a tenth (10%) of the overall Polygon (POL) token holders who were currently in the green.
Essentially, more than 85% of our over half a million users are still experiencing losses, while fewer than 4% (approximately 23,000) have just broken even. In other words, the majority of our holders continue to face losses, despite the ongoing market rally.
In simpler terms, these significant losses allowed users to hang on long enough to at least recoup their original investment instead of suffering a loss. This could potentially boost POL’s upward trend, thereby reinforcing the recent large-scale investor actions as well.
Price action analysis
According to the price graph, Polkadot (POL) still has ample room to extend its upward momentum, given the minimal On Balance Volume (OBV) it currently shows. Earlier predictions by AMBCrypto indicated that if POL surpassed $0.6, it could significantly boost the ongoing price rise.
Read Polygon [POL] Price Prediction 2024-2025
A significant jump over $0.8, occurring at the same time as a three-month price band around early 2024 and Fibonacci retracement levels of 50-61.8%, may indicate a robust indication for the trend’s ongoing rise.
If POL targets March highs of $1.2, nearly 160% of potential gains could be tapped.
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2024-11-28 14:15