Polygon Risks 40% Fall as Whale Transaction Volume and TVL Drops

The Declining TVL and large transaction volumes indicate a weakening Polygon network, adding to bearish pressure.

If POL closes below $0.39, expect a potential 28%-40% drop toward $0.2916 or even $0.23.

Holding $0.39 support and breaking above $0.46 could push Polygon to $0.6238.

With a recovery in BTC price crossing over the $105,000 mark, Polygon stands on thin ice. Over the past 24 hours, Polygon has increased by 2.09% to reach a market price of $0.40.

However, the increased volatility and the stunted network load warn of an intense correction if the situation remains the same.

Polygon Price Analysis: Will Bulls Hold the Key Support?

In the daily price chart, the Polygon price trend reveals a stronger pullback phase in motion, starting from the recent swing high of $0.76. Polygon price recently tested a low of $0.3825, marking a near 50% decline within two months.

However, a swift reversal from $0.3825 results in a Morning Star pattern with an intraday gain of 3.27%. The ongoing pullback comes after a massive 163% rise during the November rally, when POL token price surged from $0.2918 to a peak of $0.7675.

Using the trend-based Fibonacci extension tool, the ongoing pullback now tests the crucial 23.6% Fibonacci support level. As Polygon avoids a close below this support level, a bullish reversal with the Morning Star pattern hints at a potential recovery run.

POL Token Price Targets

The bullish reversal comes from a local support trendline that creates a falling wedge pattern. Hence, the bullish reversal in Polygon is likely to test the overhead resistance trendline near the $0.46 mark.

In the case of a trendline breakout, Polygon’s potential extends to the 78.6% Fibonacci level at $0.6238. However, as the broader market remains volatile, closing under the 23.6% Fibonacci level at $0.39 will mark a massive bearish move.

In such a case, the Polygon price could decline by 28% to reach the $0.2916 support level.

Bearish Threat: Analyst Predicts 40% Crash for Polygon

Adding to the downside risk, Ali Martinez, an independent crypto analyst, has highlighted the possibility of a massive crash in Polygon.

#Polygon $POL could be on the verge of a 44% correction to $0.23! pic.twitter.com/QLg7GkmfXX

— Ali (@ali_charts) January 29, 2025

could be on the verge of a 44% correction to $0.23!

— Ali (@ali_charts)

Suggesting a descending triangle pattern in the 4-hour chart, Polygon has broken under the crucial support at $0.41. Based on Fibonacci levels, Ali suggests a potential pullback of 40% to $0.23.

Polygon Network Faces Pressure as TVL Drops Sharply

Amid the rising bearish pressure over the Polygon price trend, the network faces intense heat. The (TVL) on the Polygon network has declined to $841.4 million, marking a significant drop from its $1.337 billion peak in November 2024.

Furthermore, large transactions over the Polygon network have subsided in value. According to data, the value of the large transactions on January 29 stood at $62 million, marking a massive surge compared to $4.41 million on January 28.

However, the overall trend over the past three months reflects the underperformance of the token. The seven-day high and the three-month high stood at $217.56 million, while the six-month high reached $2.06 billion.

Compared to historical price trends, large transaction volume has maintained a declining trend since the 2021 bull market.

In conclusion, with Polygon standing at a make-or-break level, traders should closely watch the $0.39 support zone for the next move.