Polygon’s Liquidity Strain: Can POL’s Support Hold as Selling Rises?

Polygon faces mounting pressure as POL selling intensifies—testing critical support levels that could determine its near-term trajectory.

Liquidity Exodus Accelerates

Whale movements and retail panic are draining liquidity faster than the network can replenish it. The once-stable support zone now looks increasingly fragile under sustained selling pressure.

Technical Breakdown Looms

Key indicators flash warning signals as volume spikes and order books thin out. If POL breaches current levels, it could trigger cascading liquidations across leveraged positions.

Ecosystem Domino Effect

DeFi protocols built on Polygon brace for impact—another reminder that in crypto, 'diversification' often just means spreading risk across equally volatile assets. The usual suspects on Crypto Twitter are already calling it a 'buying opportunity' while quietly trimming their own bags.

Will Polygon's fundamentals prevail, or is this another case of 'number go down' technology outperforming its promises?

Key Takeaways

POL has seen outflows both on-chain and off-chain, adding to the market’s bearish sentiment. However, on-chain activity shows weakness as existing users churn while new users drop off.

Polygon [POL] declined 6% in the past day, continuing on its bearish path after recording a 46% fall over the past year.

Sentiment remained weak as liquidity outflows, both on-chain and on exchanges, intensified during this period. AMBCrypto examines what could come next for POL.

Liquidity outflow affects POL

Liquidity outflows have been consistent, both on-chain and off-chain.

According to Artemis, Polygon recorded a net outflow totaling approximately $105,900. This implies that investors are bridging their POL and reallocating into other assets that they believe will be more profitable.

The same trend plays out off-chain, with liquidity outflow dominating spot exchanges. In the past day, $263,000 worth of POL was sold.

Source: CoinGlass

Likewise, the derivatives market reflects the same bearish outlook, as Open Interest (OI) declined with $9.88 million worth of positions closed in the past day.

A continued outflow across all market segments like this will increase downward pressure on POL’s price and drive further market decline.

On-chain activity remains weak

On-chain activity has remained weak. According to Artemis, POL has recorded a week-over-week decline in active addresses.

At the time of writing, weekly active addresses had fallen to 2.2 million. Weak activity from these addresses impacts price as less POL is being utilized, resulting in reduced demand.

Source: Artemis

Similarly, there has been a notable decline in liquidity from new users adopting POL, showing a lack of interest in the asset.

At the time of writing, new users stood at 99,000 after only a slight rebound in the past day.

If sentiment—particularly with on-chain adoption—continues trending lower, it could add more POL supply to the market, putting further strain on price.

Chart skew still bullish

Despite the negative sentiment, the chart suggests that a rally remains possible. POL has dropped into a key demand zone between 0.2318 and 0.2264.

This zone has triggered rallies for POL three times since August. On its fourth test, the price has shown signs of a bullish recovery, suggesting a possible rebound.

Source: TradingView

However, this zone may fail to hold if selling pressure persists. Support levels often weaken after repeated tests, which could mean there are not enough buy orders left to counter continued sell-offs.