- POL appears to have formed a bull flag on its four-hour chart suggesting an upcoming uptrend.
- This uptrend could face resistance given that a majority of holders are yet to become profitable.
As a seasoned researcher with a knack for deciphering market trends and patterns, I find myself intrigued by Polygon [POL]’s recent performance. The bull flag formation on its four-hour chart suggests an imminent uptrend, but it’s important to remember that the road to profitability is often paved with challenges. Given the majority of holders are yet to turn a profit, this uptrend could face some resistance.
At the moment of publication, Polygon (POL) was trading at $0.655, marking an 11% increase over the past 24 hours. This surge comes as a contrast to previous bearish patterns, with the price still showing a 7% decrease over the last week.
In late November, much like many other alternative cryptocurrencies, Polygon experienced a robust upward trend. However, it encountered a setback earlier this month. This upward movement followed by the decline created what appears as a ‘bull flag’ pattern on Polygon’s 4-hour chart.
Based on this pattern, it appears that the price trend for POL may persist upward, though increased buying activity is crucial to drive a breakthrough.
The bars on the volume histogram indicate a low level of both buying and selling transactions. On the other hand, the Money Flow Index (MFI) hints at an upward trend in buying activity following its peak at 62.
In simpler terms, when the Moving Average Convergence Divergence (MACD) line changes color to green, it signals that the bulls are taking over the market again. This shift in color is a sign of increasing buying activity.
Simultaneously, the Moving Average Convergence Divergence (MACD) line on this shorter time frame is climbing upwards, and when it surpasses the signal line, it would suggest a short-term optimistic trend.
Key levels to watch
Approximately 10,000 investors purchased Polygon (POL) at prices ranging from $0.65 to $0.67, according to the In/Out of the Money Around Price (IOMAP) metric by IntoTheBlock. This price range could potentially function as a support level. If the price were to drop below this zone, it might trigger a downward trend.
Keep an eye on another group of interest: the approximately 10,270 wallets that purchased over 31 million POL tokens when their price ranged between $0.67 and $0.69. This price range might function as a robust resistance level since these wallets could choose to sell once they achieve profitability.
Polygon’s dApp activity could impact price
According to DappRadar’s data, there’s a significant decrease of over 8% in the weekly volume of decentralized applications (dApps) on Polygon, currently valued at approximately $2.41 billion. At the moment of reporting, the number of unique active wallets (UAWs) also saw a decline of around 10%.
On the Decentralized Finance (DeFi) side, Polygon has made a significant comeback. As reported by DeFiLlama, the Total Value Locked (TVL) has soared to reach $1.195 billion. This TVL figure is currently at its peak in over a month’s time.
If the Polygon network continues to show strength and growth, it could bode well for POL.
Long/short ratio shows a shift in sentiment
On December 9th, Polygon’s long/short ratio hit a monthly low of 0.79 due to an increase in short-selling actions. But, surprisingly, the ratio has since climbed up to 0.90.
Currently, the proportion of traders taking a short position on POL is higher at 52%, suggesting that most traders have a pessimistic view about further price increases, as less traders appear to be bullish on a prolonged uptrend.
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2024-12-13 05:11