Ethereum's rival, Polygon, surpasses Ethereum in a significant statistic, indicating possible price surge for Polygon.
In the current cryptocurrency landscape, Polygon (POL) and other digital assets, including Bitcoin, are experiencing a downtrend due to a short-term market correction following recent strong gains. This correction is a result of overbought technical conditions, as Bitcoin reached highs near $110,529, which triggered a rejection from upper Bollinger Bands and stochastic peaks[2].
The broader cryptocurrency market took a hit, with a decline of approximately 4% around early July 2022. Bitcoin saw a minor drop of 0.3%, while other large-cap altcoins like Ethereum, XRP, and Solana experienced more significant falls, with XRP plummeting over 4% and Solana dropping by 3%[1]. The high correlation between Bitcoin and other altcoins means that bearish sentiment in Bitcoin often leads to declines in altcoins, including Polygon.
Investor caution is also playing a role in the downtrend, with total crypto trading volume falling below $100 billion. This suggests that many traders are adopting a wait-and-see approach amid mixed macroeconomic signals and geopolitical risks that create volatility[1][3]. Although there is still cautious optimism about longer-term bullish trends, near-term volatility and liquidation triggers are driving today's price drops.
Despite the current downtrend, Polygon shows signs of a potential bullish reversal. The daily chart of Polygon shows a developing double-bottom pattern at $0.1500, and a bullish breakout could occur in the falling wedge pattern if the price surpasses the neckline at $0.2755, a level last seen in May this year[3]. If a bullish breakout occurs, the initial target would be $0.2755, representing a potential 53% gain.
Moreover, Polygon has flipped Ethereum in terms of weekly non-fungible token (NFT) sales. NFT sales on Polygon increased by 52% in the last seven days to $24 million, while Ethereum NFT sales decreased by 5.7% to $23 million in the same timeframe[4]. Courtyard was the primary driver of NFT volume on Polygon, with over $18 million in sales.
Polygon is also making strides in the stablecoin sector, with a stablecoin supply of $2.4 billion. Although competitors like Base and Unichain have total value locked of over $4.9 billion and $1.16 billion, respectively, Polygon's stablecoin supply has risen by 8.5% in the last 30 days. The number of transactions on Polygon has surged by 39% to 92.6 million in the last 30 days.
In conclusion, while Bitcoin and altcoins, including Polygon, are in a downtrend due to a short-term market correction, a bullish reversal potential has been spotted in Polygon. The double-bottom pattern and the surge in NFT sales, as well as the growth in the stablecoin sector, indicate that Polygon is gaining traction. However, a drop below the double-bottom support at $0.1500 would invalidate the bullish outlook.
- The downtrend in the cryptocurrency market also includes digital assets like Polygon and Bitcoin, resulting from a short-term market correction following strong gains.
- The high correlation between Bitcoin and other altcoins, such as Polygon, means that declines in Bitcoin often lead to falls in altcoins.
- In the Bitcoin market, a minor drop of 0.3% occurred, while large-cap altcoins like Ethereum, XRP, and Solana experienced more significant declines.
- A bullish reversal potential has been identified in Polygon, with a developing double-bottom pattern at $0.1500 and a significant increase in weekly non-fungible token (NFT) sales.
- Polygon's stablecoin sector is growing, with a stablecoin supply of $2.4 billion and a surge in transactions by 39% in the last 30 days.
- Investors, influenced by mixed macroeconomic signals, geopolitical risks, and overbought technical conditions, have adopted a wait-and-see approach, leading to a decline in total crypto trading volume.
