Key Takeaways
How can impact Polygon’s short-term outlook?
Shrinking reserves and higher active addresses signal tightening supply and rising accumulation momentum.
What do derivatives and liquidation data reveal about upcoming price direction for Polygon?
Taker Buy dominance and cooling liquidations suggest the market is stabilizing for a potential breakout.
Polygon’s [POL] exchange reserves have continued to decline sharply since mid-October, falling to multi-month lows as tokens leave centralized platforms.
This steady reduction signals tightening supply and reduced selling pressure from large holders.
Typically, when exchange reserves fall, the available market liquidity decreases, allowing price momentum to strengthen once demand rises.
Moreover, the surge in active addresses reflects robust on-chain engagement, highlighting a healthy network expansion phase.
Together, these supply and demand shifts suggest that accumulation could be taking shape, laying the groundwork for Polygon’s next potential breakout.
Is a breakout imminent?
Polygon’s price continues to hover within a descending channel between $0.21 and $0.17, where repeated rebounds at lower levels emphasize buyer strength.
The shaded green zone around $0.18 acts as the main accumulation range where bulls repeatedly defend support.
Meanwhile, the MACD indicator shows a narrowing gap between signal and MACD lines. This hint at an early bullish crossover that could ignite upward momentum.
A breakout above the descending trendline may push the price toward $0.25 and later $0.29.
However, if the $0.17 floor weakens, short-term downside pressure could resurface before any sustained recovery emerges.
Source: TradingView
Derivatives lean bullish as conviction strengthens
Futures market data shows Taker Buy dominance over the past 90 days, indicating that buyers maintain control even amid brief corrections.
This shift highlights growing confidence among spot traders, accumulating at discounted prices.
Additionally, it reinforces the narrative that institutional participants may be positioning early ahead of a broader market recovery.
The balance of power favoring buyers typically supports price stability after extended declines.
Hence, sustained Taker Buy dominance paired with low exchange reserves adds conviction to the possibility of a trend reversal in the near term.
Key liquidity zones near $0.19 and $0.18
CoinGlass liquidation heatmap data highlighted heavy liquidation activity around $0.19 and $0.18, zones where leveraged traders have been squeezed recently.
These clusters often represent short-term liquidity pools that attract price reversals once leveraged pressure cools.
The minimal liquidation buildup below $0.175 suggests reduced downside volatility, reinforcing that the current range could serve as a consolidation base.
Therefore, if buying momentum continues to absorb remaining sell orders, the token might regain stability above $0.19, turning this liquidity region into a springboard for the next upward push.
Is a Polygon recovery on the horizon?
Polygon’s tightening supply, strong network activity, and sustained buyer dominance collectively hint at a potential rebound forming.
With volatility cooling and key support levels holding firm, the token appears to be transitioning from accumulation to preparation for a breakout.
A decisive close above $0.21 could confirm the start of Polygon’s next bullish phase.
