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An estimated 93% of Polygon holders could face losses in their crypto investments after a large investor sold a large chunk of its Polygon (POL) holdings, causing the coin to slump.
Some analysts ask if POL investors should worry about the losses and rethink their investments in the token.
$1.32 Million Losses
Market observers said that Polygon could experience significant pressure right now after a large investor decided to offload his/her holdings.
Data showed that a whale sold $2.28 million worth of POL or about 5.64 million tokens to Coinbase. Analysts said that after the large investor offloaded a huge volume of POL, the virtual coin suffered a $1.32M loss.
Some market commentators suggest that the whale activity could indicate a shift in sentiment, explaining that a large investor acquired these tokens in the last two months for $3.6 million.
Consequently, the offloading of this huge volume of POL has put the coin’s price movement in uncertainty, putting more pressure on the crypto which has been trying to maintain crucial support levels. Could POL be heading to bearish territory?
Will The Polygon Coin Dip Further?
Analysts said that only 4.58% of Polygon holders are making a profit, an indicator that might further dampen investors’ optimism.
Data showed that 93.51% of the wallets are currently facing losses because of devaluation after acquiring the coins at a higher value.
Several analysts explained that for the POL crypto to enter a bullish phase, it needs to break through the resistance between $0.43 and $0.45 and alter the current market sentiment, which is leaning towards a bearish phase.
As of press time, Polygon (POL) is being traded at $0.4001, still struggling to breach the $0.43 level.
Market observers warned that if the token failed to break through this resistance barrier, it could potentially intensify the selling pressure and deepen the financial losses.
Some analysts believed that the coin could further slide down, as suggested by the descending wedge pattern unless buyers reclaim higher levels. They said it is critical for POL to stay above $0.40 because if not, it might face a deeper correction.
Declining Network Activity
Data showed a 58.67% decline in the number of new addresses over the past week, while the number of active addresses plummeted by 44.34% for the same period.
Analysts said these figures indicate weakening user engagement, suggesting reduced demand for Polygon, which will make it more challenging for the token to push for a recovery.
On the brighter side, there has been an increase in institutional movement, with POL transactions between $100K and $1M skyrocketing by 620%. However, retail interest is fading as transactions under $100 have decreased dramatically.
POL retail traders are considered essential to the coin’s recovery because they are crucial in sustaining rallies. Their absence might hamper the token’s recovery and cause it to not be able to pull itself out of the downward movement.
Featured image from MoneyCheck, chart from TradingView
