Polygon price wedge points to more gains as addresses jump

Polygon price has crawled back in the past few days as the number of active addresses on the chain rises.

Polygon (POL) rose to an intraday high of $0.2460, its highest level since March 9 and 24% above its all-time low. It remains about 70% below its peak in November last year.

Polygon’s rebound is mostly because Bitcoin (BTC) and many other altcoins like Solana (SOL) and Binance Coin (BNB) have bounced back in the past few days.

It also coincides with growth in on-chain activity. According to Nansen, the number of active addresses on the network rose by 13% over the last seven days to 2.34 million. Transaction volume also edged higher to 20.7 million.

Additional data from DeFi Llama shows signs of stabilization in Polygon’s decentralized finance ecosystem. The total value locked on the network rose by 5.7% in the last week to $719 million. Bridged TVL increased to over $4.64 billion, while total stablecoins in the ecosystem climbed to nearly $2 billion.

A large share of the TVL growth came from Quickswap, whose weekly TVL surged by 577% to $103.8 million. Other decentralized applications such as Morpho Blue, Aura, and KlimaDAO have also seen notable inflows in recent days.

Still, challenges remain for Polygon as competition in the layer-2 space intensifies. Despite the recent gains, its TVL remains well below the all-time high of nearly $10 billion.

Layer-2 blockchains like Base and Arbitrum have overtaken Polygon in terms of DeFi TVL, NFT volum, and decentralized exchange volumes. For example, DeFi Llama data shows that the Polygon DeX networks have handled just $3 billion in the last 30 days, while Arbitrum and Base have processed $23 billion and $21 billion, respectively. 

Polygon price analysis

The daily chart shows that the POL price peaked at $0.7687 after its conversion from MATIC and then crashed to a low of $0.1900 this month. The coin has formed a bullish divergence pattern as the Relative Strength Index and the MACD indicator have pointed upwards. 

The coin has also moved above the upper side of the falling wedge pattern. A wedge is seen as one of the most popular bullish reversal patterns in technical analysis. As such, Polygon’s price is likely to continue climbing, with bulls eyeing a retest of the key resistance at $0.2854, the lowest level from Nov. 4. A drop below the support at $0.1901 would invalidate this bullish outlook.