
Table of Contents
- Polygon Price Declines: A 47% Drop
- Polygon Network Activity: A Sharp Decline
- Polygon Ecosystem Struggles: DeFi and NFT Slowdown
- Polygon Price Pattern: Bearish Outlook Ahead
Polygon Price Declines: A 47% Drop
Polygon’s price has experienced a significant decline, dropping to $0.3910 on Tuesday, representing a 47% decrease from its highs in December 2024. This downturn is a reflection of the ongoing struggles within the Polygon ecosystem, which has failed to maintain the momentum that drove its growth earlier in 2024.
Polygon Network Activity: A Sharp Decline
According to data from Nansen, the number of active addresses on the Polygon network has fallen by 12% over the past 30 days, reaching 5.96 million. This drop places Polygon far behind other layer-2 networks, with Base leading the pack by recording 21.7 million active addresses in the same period.
While Polygon’s transaction volume has increased by 7% to 91.5 million, the network’s fee revenue has taken a significant hit, plunging 38% to just $835,000. In stark contrast, Base generated $15.5 million in fees and handled over 218 million transactions during the same timeframe.
Polygon Ecosystem Struggles: DeFi and NFT Slowdown
Polygon’s difficulties are not limited to its transaction volume and fee revenue. The total value locked (TVL) in Polygon’s DeFi ecosystem has dropped to $842 million, a sharp contrast to Base’s $3.41 billion and Arbitrum’s $3 billion TVL. This indicates a significant slowdown in DeFi activity on the network, which has historically been a key driver of Polygon’s growth.
Polygon’s decentralized exchange (DeX) ecosystem has also been underperforming. Weekly trading volume on Polygon’s DeXs fell by 20% to $1.2 billion, while Base, a relatively newer network, handled $10.7 billion in the same period.
The NFT market, where Polygon once had a strong foothold, has also seen a sharp decline. According to CryptoSlam, Polygon NFT sales dropped a staggering 71% in the last 30 days, down to $24.8 million. Meanwhile, Base saw an impressive 388% increase in NFT sales, reaching $22.7 million during the same period.
Polygon Price Pattern: Bearish Outlook Ahead
The technical chart for Polygon’s price suggests more downside ahead. The four-hour chart reveals that the POL token peaked at $0.7671 after its conversion from MATIC last year. Recently, a descending triangle pattern has formed, with the lower side consistently testing the $0.4138 support level.
Despite several attempts, Polygon has failed to drop below this key level since December of the previous year. A falling triangle pattern is often considered a bearish signal, suggesting that further price declines could be imminent.
Moreover, Polygon has recently dropped below its 50-period moving average, which reinforces the bearish outlook for the token. As the path of least resistance appears downward, analysts are eyeing the next key support level at $0.3425, which represents the token’s lowest swing from November 15.
Conclusion
Polygon’s price decline and underwhelming ecosystem performance are clear indicators of the ongoing struggles it faces. The drop in active addresses, transaction volume, fee revenue, and the overall slowdown in DeFi and NFT activity have contributed to the negative outlook surrounding the platform. If the current trend continues, Polygon may face further price declines, with support levels below $0.3910 likely to be tested in the near future.