Polygon’s native token, POL, showed significant strength on April 25, extending its winning streak to five days and decisively breaking free from a persistent five-month downtrend. This upward momentum coincides with growing activity within its ecosystem and a notable surge in demand for Polygon-based NFTs.
The POL cryptocurrency experienced a sharp rally, climbing nearly 20% to hit an intraday peak of $0.26. This pushed its weekly gains to 34% and represented a substantial 70% recovery from its lows earlier in the month. Consequently, its market capitalization climbed back over the $2 billion threshold, settling around $2.15 billion.
Driving this price action was a dramatic increase in trading activity. The 24-hour trading volume for POL skyrocketed by 270%, exceeding $340 million, indicating strong buying interest. Derivative markets mirrored this enthusiasm, with open interest in POL futures contracts jumping 25% to $107 million within just 24 hours.
A key factor fueling the optimism appears to be the recent introduction of the Agglayer Breakout Program. This Polygon initiative is designed to foster promising blockchain projects building on Agglayer and Polygon infrastructure.
The program offers crucial support, including funding and technical resources, to early-stage startups. Importantly, it also directly benefits POL stakers, who are set to receive airdrops of new project tokens, typically ranging from 5% to 15% of the total supply from graduating projects.
Two early participants, Privado ID and Miden, are already gearing up for their token distributions. Privado ID plans to allocate approximately 5% of its tokens, while Miden intends to airdrop 10% to eligible POL stakers.
The rally is further supported by rising interest in Non-Fungible Tokens (NFTs) on the Polygon network. Recent data indicated that NFT sales volume on Polygon reached $22.1 million in the week ending April 22, slightly edging out Ethereum’s $21.8 million for the same timeframe.
Polygon also demonstrated leadership in user acquisition for NFTs. During the past week, the platform attracted 47,592 unique NFT buyers, marking a significant 62% increase compared to Ethereum’s 39,498 buyers during the same period.
Growing conviction among larger investors is also becoming apparent. On-chain data reveals a consistent rise in the number of wallets holding between 10,000 and 100 million POL tokens. This pattern suggests accumulation by both whale investors and mid-sized holders, possibly in anticipation of further price increases.
POL Technical Outlook
From a technical standpoint, the daily chart for POL shows a clear breakout above the upper boundary of a descending channel that had contained the price since December 2023. Such breakouts often herald a potential trend reversal, and the current momentum appears robust.
Adding to the bullish technical picture, a ‘golden cross’ pattern formed on the daily chart. This occurs when the shorter-term 9-day Exponential Moving Average (EMA) crosses above the longer-term 20-day EMA, a signal not seen since November 2024. Notably, that previous instance preceded a 112% POL rally over the following month.
Momentum indicators further reinforce the positive outlook. The Aroon Up indicator registered a high reading of 92.86%, contrasting sharply with the Aroon Down at 35.71%, signaling strong buyer control. The Supertrend indicator also flipped to a buy signal, positioning its green support line beneath the current price for the first time since last December.
With these combined factors, technical perspectives suggest potential upside targets. Some chart analyses interpret the current move as part of an Elliott Wave structure, potentially nearing a Wave 3 peak around the 1.618 Fibonacci extension level. A corrective pullback, typical of a Wave 4, might find support in the $0.241 to $0.217 range.
Furthermore, some market observers speculate that this bounce could signify the beginning of a larger-scale bull cycle, potentially concluding a multi-year correction phase. Sustaining levels above the recent low of $0.151 is seen as crucial, with a break above the $0.768 resistance possibly opening the path towards previous all-time highs.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.