Polygon [POL] is experiencing strong downside pressure. Since the altcoin’s uptrend collapsed at $0.12, it has since closed at lower lows for two consecutive days.
As a result, Polygon lost $0.11 support and fell to a low of $0.105. As of this writing, Polygon was trading around $0.108, marking a 12.3% decline on the daily charts.
Over the same period, the altcoin’s trading volume dropped 34% to $157 million, indicating a reduced market slowdown.
Polygon under intense bearish pressure
On the 25th of August, POL surged to a high of $0.12, largely driven by strong exchange outflows. Inasmuch, AMBCrypto reported that Polygon’s outflows surged 690%, suggesting strong buying pressure.
However, it seems this buying pressure was short-lived, as most investors turned to selling. As a result, the altcoin has continued to fall, driven by strong bearish pressure.
On the derivatives side, Polygon’s Open Interest dropped 11.3% to $111 million, while the derivatives volume plunged 38% to $157 million.
While the declining volume suggested reduced market activity, falling Open Interest suggests that leverage is leaving the market. Hence, traders are closing more positions.
These market conditions are further confirmed by the Futures outflows.
Over the past 24 hours, POL saw $49.43 million in Futures outflows compared to $39.3 million. As a result, the Futures netflow dropped 196% to -$3.04 million.
On the Spot market, the same pattern was observed. According to Coinalyze data, Polygon recorded 139 million in sell volume.
Often, seller dominance across the market has weakened the market structure, historically leading to lower prices.
Is $0.10 support at risk?
Sellers have shown greater determination to cash out Polygon’s recent gains. As a result, the altcoin Relative Strength Index (RSI) formed a bearish crossover and fell to 69.
Although the indicator formed a bearish crossover, it still holds within a bullish zone. At these levels, RSI shows that both buyers and sellers are active, but sellers are yet to fully retake the market.
On top of that, altcoin’s DI+ jumped to 45, while the DI- fell to 12 with ADX rising to 50. Such a setup for this indicators suggests that the upward momentum still holds strong.
Often such a setup has preceded trend continuation. Therefore, even though sellers are turning aggressive, bulls are holding strong and the uptrend is tight.
If the bulls continue to hold, they will defend the $0.10 support and most likely reclaim $0.12 with $0.14 as key resistance.
However, if the selling pressure persists and sellers finally overpower buyers, $0.1 will fail to hold and fall to $0.094.
Final Summary
- POL faced rejection at $0.12, dropping 12% and breaching $0.11 support to a low of $0.105.
- Polygon was rejected, driven by strong selling pressure across the market, but bulls are still holding the market.
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