Polygon (POL) has recently shown encouraging signs of demand, repeatedly testing and holding the critical $0.1 psychological support zone. Despite these positive short-term reactions, the broader market sentiment and Polygon's long-term trend present a more complex picture for investors and traders.
Navigating POL's Price Dynamics
After retesting the $0.1 demand area in early January and again over a recent weekend, POL demonstrated a notable 15.25% bounce. This resilience at a key support level is significant, especially considering the impressive burn rate of POL tokens, with 3 million burned in a single day and a total of 25.7 million throughout the month – one of its largest monthly burns. However, this bullish fundamental did not fully counteract the wider market's fear, driven by selling pressure on Bitcoin. While the weekly timeframe reveals a lingering bearish trend for POL stretching back to December 2024, the daily chart indicates that the altcoin is currently range-bound, oscillating between the $0.10 support and $0.18 resistance levels, demonstrating an equilibrium of buying and selling pressure.
The Bitcoin Factor and Future Outlook
The immediate future of Polygon's price action appears heavily dependent on Bitcoin's performance. POL's recent bounce coincided directly with a BTC rally, underscoring the dominant influence of the flagship cryptocurrency. Key resistance levels for POL include $0.1325 and a short-term supply zone around $0.13. While a bounce extending to these levels is possible, a sustained breakout beyond them seems unlikely unless Bitcoin breaches its local resistance at $79.4k. Long-term investors might find encouragement in the strong defense of the $0.1 support, but it's premature to declare a full recovery. Swing traders are advised to closely monitor the $0.13 supply zone; a bearish reaction here could signal a selling opportunity, while a reclaim of this level might pave the way for a rally towards $0.186.
