POL Primed: On-Chain Signals Surge

• After discovering a support level within a pivotal range the prior day, the price of Polygon experienced an upward surge on Tuesday.
• Data derived directly from the blockchain suggests a positive outlook, characterized by an increase in Open Interest, stability in the stablecoin market capitalization, and growing influence over stablecoins not denominated in USD.
• Technical analysis indicates a potential upswing, with POL potentially reaching price points exceeding $0.33.

Polygon (POL), formerly known as MATIC, is trading positively, exceeding $0.28 at the time of this report on Tuesday. This follows a period of support found within a significant price range earlier in the week. Reinforcing this upward trend are strengthening on-chain metrics, including an increase in Open Interest (OI) and stablecoin market capitalization. Furthermore, Polygon’s influence over stablecoins that are not USD-based is also growing. Given the current technical configuration, POL has the potential to surge past the $0.33 mark, provided the current momentum persists.

Derivatives and On-Chain Metrics for POL Suggest a Bullish Trend

The Open Interest in Polygon futures contracts across various exchanges has seen a substantial climb, rising from $115.46 million last Friday to $177.29 million by Monday. This represents the highest level observed since December 10 and showcases a consistent increase. A rising OI typically signifies fresh capital entering the market and increased buying activity, which could provide the necessary boost for the ongoing POL price surge.

Polygon Open Interest chart. Source: Coinglass

According to data sourced from the crypto analytics platform DefiLlama, Polygon’s stablecoin market capitalization has experienced a notable increase since mid-August. It currently stands at $2.95 billion as of Tuesday, marking the highest value since mid-July 2021. This heightened stablecoin activity and escalating value within the Polygon ecosystem point towards a favorable outlook. These factors tend to enhance network utilization and could potentially attract a larger user base to the platform.

POL stablecoin market capitalization chart. Source: DefiLlama

Moreover, Polygon is responsible for facilitating more than half of all non-USD stablecoin transactions, boasting a lifetime transfer volume of $3.2 billion. This further reinforces the optimistic outlook for the cryptocurrency.

Polygon Price Prediction: Momentum Indicators Suggest Potential Upside

The price of Polygon saw an increase of over 8% on Sunday, breaking through a key resistance zone situated between $0.25 and $0.27. While a slight dip occurred on Monday, the price subsequently found support within this established zone. As of Tuesday, Polygon is showing further gains, trading above $0.28 with an increase of more than 5%.

Should Polygon maintain its current upward momentum and close above its weekly resistance level of $0.29, it could extend its gains toward the next daily resistance target of $0.33.

The Relative Strength Index (RSI) on the daily chart is currently at 64, positioned above the neutral level of 50 and trending upwards. This indicates substantial bullish momentum. Additionally, the Moving Average Convergence Divergence (MACD) indicator exhibited a bullish crossover on Sunday, generating a buy signal and lending further credence to the positive outlook.

POL/USDT daily chart 

Conversely, if POL undergoes a price correction, it could potentially decline towards the lower boundary of the support zone, around $0.25.