Polygon price drops 12%, signaling potential oversold conditions, with signs of a possible rebound in 2025, though market factors and bearish momentum may influence its recovery.
The cryptocurrency market is very unpredictable, and Polygon (MATIC) is no different. Recently, Polygon’s price dropped by 12% in just 24 hours, making many investors wonder if it has been sold too much and if it could go back up in 2025.
Polygon Price Drop: A Closer Look
Polygon, a popular solution built on Ethereum, promises faster and cheaper transactions. Many investors are interested in it because of this. However, like many other cryptocurrencies, it has faced big challenges in the market, causing its price to drop.
Polygon’s price recently dropped by 12% in just 24 hours, which is part of a bigger trend of falling prices. Over the past month, it has lost about 33% of its value, making many investors worried. The price drop happened at the same time as a big rise in trading volume, which went up by 33% to $248 million, according to CoinMarketCap.
The increase in trading volume happened because many people sold their Polygon tokens to avoid losing more money. As a result, Polygon’s price dropped to $0.457, and now many people are wondering if the token has been sold too much.
Is Polygon Oversold?
One important tool traders use to see if an asset is oversold is the Relative Strength Index (RSI). The RSI is a popular technical analysis tool that measures the speed and change of price movements. When an asset’s RSI falls below 30, it typically indicates that the asset is oversold and may be due for a price rebound.
For Polygon the RSI recently dropped to 23 on the four-hour chart, which is very low. This suggests that the cryptocurrency might have been sold too much and could go up soon. If the RSI stays low for a long time, it might mean the market has overreacted, and the price could change soon.
Historical Trend of RSI and Price Recovery
Polygon has often bounced back when its RSI reaches low levels. In the past, after dropping to similar levels, Polygon has seen its price go up. This could be an important time for investors to think about buying, as prices might go back up soon.
If Polygon’s RSI shows that it is oversold, investors might start buying again, which could make the price go up. With the RSI suggesting a possible recovery, the price could rise to $0.538, where there might be some resistance.
Factors to Consider for Polygon’s Price Rebound
While the oversold condition presents a promising signal for a price rebound, other market indicators and conditions must also be considered.
The Average Directional Index (ADX)
The ADX is a tool that helps us understand how strong a trend is. Right now, the ADX shows that the bearish trend in Polygon is getting stronger. If this keeps going, Polygon’s price may keep falling. The next important support level to watch is $0.416, based on Fibonacci retracement levels.
If the downward trend continues, Polygon might face more pressure before it can recover. However, if the RSI encourages more buying, it could change the trend. This might help Polygon break past the resistance at $0.538 and go higher.
dApp Activity and Network Engagement
One reason Polygon could have long-term value is its strong decentralized application (dApp) ecosystem. Even though the price dropped, Polygon’s dApp volumes grew by 18% in the last 24 hours, reaching $244 million. However, the overall trend shows a decrease in monthly dApp volumes, showing that Polygon is having trouble keeping users engaged. For Polygon to rise again, it will need more steady and strong growth in dApp activity.
The Long/Short Ratio
Another factor adding to the negative market mood is Polygon’s Long/Short Ratio, which recently dropped to 0.885. This shows that short sellers are currently in control. If the price suddenly goes up, it could cause a short squeeze, forcing short sellers to close their positions. This could lead to a quick rise in buying activity.
What’s Next for Polygon?
As we look ahead to 2025, Polygon’s price will likely be affected by market mood, technical analysis, and overall crypto trends. While the oversold RSI suggests a possible price rebound, other factors like negative market momentum and pressure could cause the price to drop further.
Right now, Polygon is at a turning point. Buyers may see the oversold conditions as a chance to push the price up. However, if selling pressure continues, Polygon might test lower support levels.
In conclusion, while there is hope for a rebound, Polygon’s future in 2025 remains uncertain. Investors should remain cautious and watch for key indicators to help inform their strategies.
Also Read: Hong Kong’s Bold Step Towards Adopting Distributed Ledger Technology
