Polygon (POL) has been experiencing a significant downturn in its price, showing a bearish performance over the last few weeks. The token has seen a steady decline in value, including a 34% price drop over the past month and a 4.53% decrease in just the past 24 hours. As the market sentiment turns negative, Polygon risks falling further, potentially hitting a low of $0.24.

Liquidity Outflows and Negative Market Sentiment

A crucial factor contributing to the potential price decline is the massive liquidity outflows from Polygon in the past 24 hours. Recent data shows that over $13.2 million worth of Polygon tokens have been sold and withdrawn from the chain. This is a clear sign of bearish sentiment, with investors withdrawing their funds due to growing concerns about the token’s future performance.

This liquidity outflow puts immense pressure on the price of Polygon, especially as the market continues to show negative signs. The negative chain netflow means that liquidity is leaving the chain, reflecting a broader lack of confidence in the asset. As a result, more holders could be forced to sell their positions, contributing to further price declines.

99% of Holders Are at a Loss

One of the most concerning aspects of Polygon’s current situation is the massive number of holders who are in the red. According to AMBCrypto’s analysis, 99.73% of POL holders are currently experiencing losses, with only 0.27% in profit. This overwhelming majority of holders who are “out of the money” creates an environment ripe for panic selling, as more investors look to minimize their losses.

When a large portion of the investor base is in a losing position, it can trigger a wave of selling activity. This further accelerates the downward pressure on the price, as more tokens flood the market. This fear-driven sell-off could worsen Polygon’s price trajectory, pushing it toward lower levels.

A Path to $0.24

If the selling pressure continues, Polygon could experience a further decline in value, potentially reaching $0.24, a price level last seen in early February 2025. POL is currently trading within a descending channel on the chart, with lower highs and lows forming a bearish pattern. A breakdown from the current support level of $0.278 would likely see the price drop to the next key support zone at $0.243.

If the market’s momentum remains strongly negative, it is plausible that Polygon could break below $0.243 and form a new low, with a further price correction ahead. The path to $0.24 seems increasingly likely as the selling pressure builds.

Bearish Trends in Spot and Derivatives Markets

Both the spot and derivatives markets are signaling further weakness for Polygon. In the last 24 hours, the derivatives market saw a decline in Open Interest by 1.29%, dropping to $78.41 million. At the same time, trading volume surged by over 73%, reaching $68.09 million. This combination of declining open interest and increasing volume indicates strong selling pressure and high momentum behind the bearish trend.

Additionally, the exchange netflow for Polygon has turned negative, with $181,500 worth of POL sold over the past three hours. This highlights the growing number of market participants who are choosing to sell off their holdings, further reflecting the bearish sentiment.

Conclusion

Polygon’s price is at a critical juncture, with massive liquidity outflows, a high number of holders facing losses, and strong selling pressure in both the spot and derivatives markets. Unless there is a significant reversal in sentiment or new buyers step in to provide support, the price of Polygon could continue its decline, potentially hitting as low as $0.24. Investors and traders need to remain cautious and monitor the market closely, as the current conditions suggest that more downward movement is possible in the near term.