Polygon (POL) has seen significant volatility, driven by intensifying sell-offs from large holders, commonly known as “whales.” After a promising 13.74% increase in price over the past week, POL has faced an abrupt 8.12% drop in the last 24 hours, signaling a shift toward a more bearish sentiment in the market. The heightened selling activity from whales, combined with a shift in retail investor sentiment, is raising concerns about POL’s price stability and potential for further declines.

Whale Activity Drives Price Decline

Recent on-chain data from IntoTheBlock indicates a notable increase in whale-driven selling. The Large Holders Netflow to Exchange Ratio, a key metric tracking the movement of assets from major holders to exchanges, surged dramatically by 737% in just 24 hours and 2,474% over the past week. This spike highlights that whales are actively transferring their POL tokens to exchanges for sale, which is exerting considerable downward pressure on the asset’s value.

In addition, large transaction volumes have been recorded, with 78 significant trades taking place during this period. Such intense selling activity points to a broader bearish trend, as whales typically hold enough market influence to shift price movements significantly. This uptick in sell-offs, along with the drop in POL’s price, suggests that the market may be entering a consolidation phase or could face a more prolonged downtrend.

Critical Support Levels and Potential for a Price Rebound

Despite the growing bearish sentiment, there are potential support levels that could help stabilize POL’s price in the short term. The asset is currently testing the critical support level of $0.3634, which has historically been a strong price floor. If this level holds, there is a possibility that POL could see a price rebound toward the next resistance zone around $0.5792. A successful bounce from this support would indicate that the sell-offs might be overdone, allowing POL to regain momentum and resume its uptrend.

However, if selling pressure from large holders continues and the support at $0.3634 is breached, the price could fall further, with the next major support zone around $0.2855. A breakdown below this level would likely signal that POL’s price trajectory has shifted decisively bearish, and the asset could experience more significant losses.

Retail Sentiment Weakens as Open Interest Drops

Alongside whale sell-offs, the sentiment from retail investors also appears to be turning bearish. According to IntoTheBlock’s data, POL’s Open Interest, which represents the total value of unsettled derivative contracts, has declined sharply in the past 24 hours, falling from $198.56K to $142.53K. This drop in Open Interest reflects a retreat from the market by retail traders, further adding to the negative sentiment surrounding POL.

Additionally, liquidation data from Coinglass suggests that bears are in control. Long positions, which were once dominant, have been heavily liquidated, while short positions remain relatively stable. The liquidation of long positions suggests that investors are abandoning their bullish bets, reinforcing the growing bearish outlook for POL.

Conclusion: POL Faces Significant Risk of Further Decline

In summary, POL is currently in a precarious position, with intensified whale selling and weakening retail sentiment pushing the asset’s price downward. The critical support at $0.3634 will be key to determining whether POL can reverse course or if further declines are inevitable. If the support holds, there may be a chance for a rebound, but if selling pressure continues, POL could risk falling as low as $0.20. Investors should closely monitor the ongoing market activity, particularly whale movements and sentiment shifts, to gauge the asset’s next move.