Polygon's Accumulation Phase Deepens as Exchange Reserves Plunge to Multi-Month Lows

Polygon (POL) is showing strong signs of accumulation, with exchange reserves sharply declining since mid-October, falling to multi-month lows as tokens move off centralized platforms. This reduction in available supply signals tightening liquidity and reduced selling pressure, potentially setting the stage for a price rally.

On-chain data reveals a surge in active addresses, indicating robust network engagement and healthy ecosystem expansion. According to CryptoQuant, the steady drop in reserves, particularly on Binance, has historically coincided with local price bottoms, as tokens shift to long-term storage or DeFi protocols.

Price action remains confined within a descending channel between $0.21 and $0.17, with the $0.18 level acting as a key accumulation zone where buyers repeatedly defend support. Technical indicators like the MACD show a narrowing gap, hinting at an early bullish crossover that could ignite upward momentum. A breakout above the descending trendline could push prices toward $0.25 and later $0.29, though a break below $0.17 might trigger short-term downside pressure.

Derivatives data adds to the bullish sentiment, with Taker Buy dominance over the past 90 days indicating sustained buyer control even during corrections. This, coupled with cooling liquidation levels around $0.19 and $0.18, suggests reduced volatility and a stabilizing market. Liquidation heatmaps from CoinGlass highlight these zones as potential springboards for recovery.

Fundamentally, Polygon's network strength is evident, with peer-to-peer transfers rising 48.5% to over $15 billion in Q3 and Tether (USDT) supply increasing 35% to about $1.47 billion. Integrations like Kolohub's USDC card top-ups and tokenized assets reaching $1.14 billion further support growth, with Messari projecting a 15-20% increase in total value locked over the next few quarters.