Polygon Surpasses Ethereum in Key Metric: POL Price Set for Breakout!
Polygon Price Faces Significant Decline Amidst Market Challenges
Polygon’s Year-to-Date Struggles
Polygon (POL) has experienced a dramatic downturn this year, nearing its lowest point since the beginning of the year. Recently, the cryptocurrency hit a low of $0.1800 on July 4, marking a staggering 76% drop from its peak earlier this year. This downturn has resulted in a loss exceeding $4 billion in market capitalization, plummeting from nearly $6 billion to approximately $1.88 billion.
NFT Sales Surge Signals Potential Recovery
Despite its price struggles, Polygon may be on the brink of a recovery, as it recently surpassed Ethereum (ETH) in weekly non-fungible token (NFT) sales. According to data from CryptoSlam, NFT transactions on Polygon surged by 52% over the past week, reaching $24 million, while Ethereum’s NFT sales dipped by 5.7% to $23 million.
The increase in Polygon’s NFT activity has been largely attributed to the Courtyard platform, which alone accounted for over $18 million in sales. Other notable NFT collections on the network include DNS, with $4.9 million in sales, and OKX NFT Creation.
Growth in Stablecoin Transactions
Polygon is also making strides in the stablecoin market, primarily driven by Polymarket. Recent data from Artemis indicates that the stablecoin supply on the Polygon network has increased by 8.5% in the past month, now totaling $2.4 billion. Additionally, the number of transactions has surged by 39%, reaching 92.6 million.
Competitive Landscape for Polygon
One of the primary hurdles facing Polygon is the stiff competition from other emerging layer-2 networks. Currently, Polygon boasts a total value locked (TVL) of over $1.2 billion, while the newly launched Unichain has quickly approached $1.16 billion. In contrast, Base has established a commanding lead with over $4.9 billion in TVL and a monthly decentralized exchange volume exceeding $28 billion.
Technical Analysis of Polygon’s Price Movement
Chart Patterns Indicate Potential for Recovery
The daily price chart for Polygon reveals the formation of a double-bottom pattern at the $0.1500 mark, with a neckline positioned at $0.2755, which was its peak in May. This neckline is situated just below the 23.6% Fibonacci retracement level.
Additionally, a falling wedge pattern has emerged, recognized as a bullish reversal formation characterized by two descending and converging trendlines. As these lines approach convergence, the potential for a bullish breakout increases.
Potential Price Targets and Risks
Should a breakout materialize, the initial target would be the neckline at $0.2755, representing a potential gain of 53% from the current price level. However, if the price falls below the double-bottom support at $0.1500, this would negate the optimistic outlook for Polygon.
