Polygon's woes deepen as SEO fires up sales

• Polygon's RSI has reached pre-sold levels after falling to 23 amid heavy selling pressure.
• 91% of Polygon wallet holders were in losses at press time, suggesting bearish market sentiment.

Polygon (POL) has declined steeply after falling 12% in 24 hours to trade at $0.457 at press time. Among this fall, transaction volumes increased by 33% to $248M, per CoinMarketCap.

Polygon has been under bearish pressure, as the price has declined by around 33% in the last 30 days.

This performance has had a negative impact on the profitability of wallets, with the percentage of wallets that are in loss increasing to 91%.

When many wallets are in losses, it causes negative sentiment in the market which leads to further price reduction. In addition, holders may choose to sell to reduce their losses, which will cause additional selling pressure.

As these weak conditions continue, are there signs of improvement, and could this trend reverse?

RSI shows that Polygon is oversold

The Polygon Relative Strength Index (RSI) on the altcoin's four-hour chart shows that the token is oversold. This metric has fallen to a value of 23, the lowest level since mid-December.

RSI is usually oversold before a correction to the upside. Furthermore, looking at past trends, POL tends to start a rally when the RSI reaches oversold levels. Therefore, the altcoin could be ready to recover.

However, the Average Directional Index (ADX) is yet to confirm the end of the decline.

In fact, the ADX line is rising, an indication that the ongoing bearish trend is becoming strong and that POL may fall to the 1.618 Fibonacci level ($0.416).

However, if the selling pressure eases as buyers consider the crossed RSI to be a good entry point, it could reverse, pushing the price to $0.538.

dApp activity is increasing

Data from DappRadar showed that dApp volume on the Polygon network has increased significantly. In the final hours, those numbers rose 18% to $244M and hit a six-day high.

However, despite this increase, transactions had fallen below $1M while the number of Unique Active Wallets (UAWs) had also fallen.

Furthermore, Polygon's monthly dApp volumes are still down 37%, suggesting that the long-term outlook remains bearish.

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Read Polygon's (POL) Price Forecast 2025–2026

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Long/Short Ratio shows a bearish trend

Polygon's Long/Short Ratio showed that the trend was on at press time after falling to 0.885. This fall showed that the number of short positions was slightly higher than the number of long positions.

Short traders tend to increase their bets when the trend is bearish. However, an influx of short positions could increase the risk of a short squeeze that could lead to impulsive buying activity.