Polygon’s sharp sell-off may be nearing its end as exchange reserves plunge and network activity rises, hinting at a quiet build-up toward recovery.
Summary
- Polygon price is still under pressure after a sustained selloff.
- Exchange reserves have been dropping as on-chain activity surges.
- Falling supply and rising demand point to bullish setup.
At the time of writing, Polygon was trading at $0.1809, down 12% over the previous week and 7% over the last day. The token is currently trading close to its lower weekly range of $0.1806 to $0.2058, having dropped 24% over the last 30 days.
Trading volume rose to $69.26 million, an 11.6% increase over the previous day. On the derivatives side, open interest dropped 13% to $60.26 million while futures volume increased 25% to $91.97 million, as per CoinGlass data.
This indicates that traders are liquidating their older positions as fresh speculative activity picks up steam.
Shrinking supply meets growing network activity
According to a Nov. 3 post by CryptoQuant contributor PelinayPA, Polygon’s (POL) on-chain data shows a distinct supply-and-demand shift that might be in bulls’ favour. The amount of POL held on exchanges, particularly Binance, has sharply dropped in recent weeks.
Historically, such declines in exchange reserves have coincided with local price bottoms, as tokens move off exchanges into long-term storage or decentralized finance protocols, reducing immediate selling pressure.
At the same time, Polygon’s network activity is rising. The number of active addresses has noticeably increased, a sign of growing ecosystem interest and user participation. When falling supply meets rising engagement, it often sets the stage for a recovery once market conditions align.
Under the hood, Polygon’s fundamentals remain solid. Peer-to-peer transfers increased 48.5% to over $15 billion in Q3, while the network’s Tether (USDT) supply rose 35% to about $1.47 billion. Its status as a low-cost payments rail has been strengthened by integrations like Kolohub’s USDC card top-ups, Slash’s on/off-ramps, and Tether’s USDT0 upgrade.
On the enterprise side, tokenized assets on Polygon reached $1.14 billion, driven by issuances from Justoken, BeToken, and even the Philippines’ Department of Budget, which is experimenting with digital bonds and IDs. According to Messari’s latest report, these efforts could increase Polygon’s total value locked by 15% to 20% over the next few quarters.
Polygon price technical analysis
On the daily chart, Polygon is still under pressure, but it may be approaching exhaustion. The token trades below all its key moving averages, from the 10-day EMA at $0.1907 to the 200-day EMA near $0.2419, confirming a short-term downtrend.
With the relative strength index currently hovering around 37, the token is approaching oversold territory, even though the MACD has started to flatten out, indicating that bearish momentum may be waning.
Immediate support sits near $0.179, a level that has held multiple times over the past week. If buyers manage to reclaim the $0.195–$0.205 zone, it could open a path toward $0.22, where heavier resistance awaits. However, before any long-term recovery can occur, a clear break below $0.175 would probably lead to another leg down.
