Polygon [POL] appears to have formed a bull flag on its four-hour chart, indicating a potential uptrend in the near future. However, this uptrend may face resistance as a majority of holders are still in a loss-making position.
Currently trading at $0.655, Polygon has experienced an 11% gain in the last 24 hours, marking a reversal from previous bearish trends despite a 7% dip over the past week. The altcoin saw a strong uptrend towards the end of November before encountering a setback earlier this month, leading to the formation of a bull flag pattern on the four-hour chart.
The pattern suggests that Polygon could continue its upward trajectory, but increased buying volumes are necessary to sustain a breakout. The volume histogram reflects minimal trading activity, although the Money Flow Index (MFI) indicates a rise in buying pressure, reaching a value of 62. Additionally, the Moving Average Convergence Divergence (MACD) suggests that bulls are gaining control, with the MACD line showing an uptrend and potentially crossing above the signal line to confirm short-term bullishness.
Key levels to monitor include the In/Out of the Money Around Price (IOMAP) metric, which reveals that nearly 10,000 addresses acquired POL between $0.65 and $0.67, serving as a potential support zone. Conversely, around 10,270 addresses purchased over 31 million POL tokens between $0.67 and $0.69, forming a strong resistance level as these holders may consider selling once they achieve profitability.
On the dApp activity front, data from DappRadar shows a decline of more than 8% in Polygon’s seven-day dApp volumes, currently standing at $2.41 billion. Despite this, the Total Value Locked (TVL) in Polygon’s decentralized finance (DeFi) sector has surged to $1.195 billion, indicating a robust recovery and potential positive impact on POL’s price performance.
The long/short ratio for Polygon recently hit a monthly low of 0.79 on December 9th due to increased short-selling activity, but has since rebounded to 0.90. Despite this improvement, 52% of traders remain bearish, signaling a lack of optimism for a sustained uptrend in the near term.
In conclusion, while Polygon shows signs of a potential uptrend, resistance levels and sentiment among traders may pose challenges. Keeping a close eye on key levels and monitoring dApp activity could provide insights into Polygon’s price movements in the coming days. The COVID-19 pandemic has brought about unprecedented challenges and changes in our lives. From social distancing measures to stay-at-home orders, we have had to adapt to a new way of living in order to prevent the spread of the virus. As we continue to navigate these uncertain times, it is important to stay informed and follow guidelines set forth by health officials.
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