Polygon POL price has weakened after a 46% year decline, driven by sustained liquidity outflows and falling on-chain activity; net outflows and closed derivatives positions are increasing downward pressure while the price tests a key demand zone that could trigger a short-term rebound.
Net outflows: POL saw ~$105,900 net on-chain outflow and $263,000 sold on spot exchanges.
Active addresses fell to ~2.2 million weekly; new users around 99,000, signaling weak adoption.
Derivatives Open Interest declined with ~$9.88 million of positions closed, increasing bearish pressure.
Polygon POL price falls amid liquidity outflows and weak on-chain activity; read analysis and outlook for traders and investors. Stay informed — COINOTAG coverage.
What is causing the Polygon POL price decline?
Polygon POL price is declining mainly due to persistent liquidity outflows and weakening on-chain activity. Net transfers off the network and sizable spot sales have lowered demand, while reductions in derivatives Open Interest reflect reduced speculative interest.
How are liquidity outflows impacting POL?
Liquidity outflows are reducing available buy-side support and increasing supply on market venues. On-chain analytics provider Artemis reported approximately $105,900 net on-chain outflow for POL. Spot exchange metrics show roughly $263,000 sold in the past day, and CoinGlass data highlights sharp declines in derivatives activity.
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Key Takeaways
POL has seen outflows both on-chain and off-chain, adding to the market’s bearish sentiment. On-chain activity shows weakness as existing users churn while new users drop off.
Price action: Polygon [POL] declined 6% in the past day, continuing a bearish path after a 46% fall over the past year.
Sentiment: Liquidity outflows, both on-chain and on exchanges, intensified during this period, weakening market sentiment.
Why are on-chain metrics important for POL?
On-chain metrics indicate real usage and adoption; falling active addresses and stagnant new-user liquidity suggest reduced network utility. These signals often precede price pressure because they reflect genuine demand trends rather than short-term trading noise.
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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 or moving POL and reallocating into other assets perceived as 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.
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Source: CoinGlass (data cited as plain text)
Derivatives markets reflect the same bearish outlook. Open Interest declined as roughly $9.88 million worth of derivative positions were closed in the past day. Continued outflows across spot, derivatives, and on-chain segments will likely increase downward pressure on POL’s price.
On-chain activity remains weak
On-chain activity has remained weak. Artemis reports a week-over-week decline in active addresses for POL.
Weekly active addresses have fallen to about 2.2 million. Lower activity reduces token utility and demand, which can translate into price pressure.
Source: Artemis (data cited as plain text)
New-user liquidity has also declined. New users currently measure roughly 99,000 after a small rebound, showing limited fresh demand for POL. If on-chain adoption continues to trend down, more tokens may be supplied to markets, worsening price pressure.
How might the chart affect short-term POL outlook?
Technically, POL has moved into a key demand zone between 0.2318 and 0.2264. Historically this zone triggered rallies three times since August, and current price action shows signs of another potential bounce.
Source: TradingView (chart cited as plain text)
That said, repeated tests of a support zone can exhaust buy orders. If selling pressure continues, the zone may fail and lead to further downside.
Frequently Asked Questions
What is the immediate outlook for Polygon POL price?
Short-term, POL faces downward pressure from liquidity outflows and weak on-chain metrics, but a tested demand zone between 0.2318–0.2264 could allow a bounce if buy-side interest returns.
How should traders interpret falling active addresses for POL?
Falling active addresses suggest lower network usage and reduced demand. Traders should view this as a signal of weakening fundamental support and manage position sizes accordingly.
Can derivatives closures cause rapid price moves in POL?
Yes. Large derivatives position closures reduce Open Interest and can accelerate sell-offs, especially during periods of low liquidity and weak on-chain demand.
What data sources inform this analysis?
Analysis references on-chain analytics and market data from Artemis, CoinGlass, and TradingView, cited as plain text for attribution.
How can investors monitor POL risk?
Monitor netflows, weekly active addresses, new-user metrics, and Open Interest. Combine on-chain signals with price action around the demand zone to time risk reduction or entry.
Conclusion
Polygon POL price is under pressure from consistent liquidity outflows and weakening on-chain adoption. While technicals point to a possible short-term rebound from a historically tested demand zone, sustained outflows and reduced active addresses increase downside risk. Monitor netflows, active addresses, and Open Interest for clearer direction. COINOTAG will continue to track key metrics and report updates.
Source: https://en.coinotag.com/polygon-pol-sees-liquidity-outflows-and-falling-active-addresses-may-find-support-in-demand-zone/