Potential Rally for Polygon as Bullish Divergence Signals a Move Towards Previous All-Time High

• Polygon (POL) is experiencing bullish momentum, with a divergence in its trading chart signaling a potential rally toward previous all-time highs.

• Despite recent gains, the altcoin’s trading volume has dropped, indicating a concern regarding sustained investor interest in the short term.

• According to crypto analyst Javon Marks, “The bullish divergence suggests POL could replicate its past trading patterns leading to notable price increases.”

Polygon (POL) is showing signs of bullish divergence, pointing toward a possible breakout and potential retest of its all-time highs.

Is Polygon poised for a significant recovery?

In recent trading sessions, Polygon (POL) witnessed a resurgence, with prices climbing over 18%, resulting in a market capitalization of approximately $5.9 billion, placing it as the 27th largest cryptocurrency. Despite this upward movement, the current trading price of $0.7063 remains significantly below its all-time high of nearly $2.90, which was achieved on December 27, 2021.

Recent analyses show a bullish sentiment surrounding POL, primarily due to a bullish divergence seen in its price chart. Javon Marks, a noted crypto analyst, highlighted this finding in a recent tweet, suggesting that the current market conditions may mirror those seen in 2021 that precipitated a rally to new highs.

If historical patterns hold true, POL might not only test its all-time high again but also potentially breach it as the market evolves. Additionally, Marks’s tweet pointed out a potential breakout from a prevailing price pattern, leading to an estimated 300% increase in valuation if bullish trends continue.

Source: X

POL’s short-term price targets and trading dynamics

Given POL’s significant gap from its all-time high, expectations for an immediate retest may be overly ambitious. An examination of the on-chain data delivered by COINOTAG points out several key indicators that shape the altcoin’s short-term price forecasts.

Data from Santiment illustrated that while POL’s price surged, there was a troubling decline in trading volume, indicating waning investor engagement. Additionally, the Market-Value-to-Realized-Value (MVRV) ratio had dropped to 37.7%, further signaling caution among traders. Glassnode’s insights reveal rising realized losses amidst the price increase, highlighting a divergence between sentiment and actual market performance.

Interestingly, despite the challenges reflected in volume and MVRV, Polygon’s transaction velocity has remained robust, suggesting that POL is actively used in numerous transactions over a specific timeframe.

Source: Santiment

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In the immediate term, if bullish momentum persists, POL may target the $0.73 level, identified as a potential liquidation barrier. Conversely, a market correction could see POL retrace to $0.68.

Source: Coinglass

Conclusion

In summary, while Polygon (POL) shows promising signs of recovery, evidenced by recent bullish movements, investors should remain cautious of the fluctuating trading volume and MVRV ratios. A strategic approach will be essential for navigating POL’s expected price action in the coming days, targeting crucial levels of $0.73 and potentially rebounding towards $0.68 if corrections occur. Understanding these dynamics will be key for anyone looking to capitalize on the upcoming trading opportunities.