Polygon's native token POL has experienced a dramatic price surge of over 70% in the last 10 days, driven by unprecedented on-chain network activity and a successful protocol upgrade. The token's price, currently trading around $0.17, has returned to a critical technical zone that has acted as a reference point since April 2025.
Network usage on Polygon has reached all-time high levels, generating more than 13.6 million POL in fees during a recent period—a 7.2X increase. This surge in activity triggered a corresponding spike in token burns, with over 12.5 million POL removed from circulation, marking a 10X rise. This fee and burn activity indicates genuine, sustained demand across the network rather than speculative trading.
The network's response to this demand pressure was the rollout of the Dandeli hardfork. This upgrade, implemented as gas prices climbed, focused on improving network capacity and fee predictability. Key changes included a roughly 30% increase in block capacity and a shift in the gas target from 50% to 65%. These adjustments allow throughput to scale to around 20 mgas per second during high demand, helping to stabilize gas fees and keep the network economical for users.
Despite the strong price rally, momentum signals are showing signs of divergence. Analysis reveals a hidden bearish divergence on the Relative Strength Index (RSI), where the RSI is forming higher highs while the price forms lower highs. This suggests cooling momentum and rising pullback risk, though it does not signal an immediate breakdown.
Holder behavior adds another layer to the analysis. Large holders (whales) have begun reducing their exposure. Wallets holding between 100 million and 1 billion POL started trimming balances around January 3, reducing holdings from roughly 743.6 million to about 708.3 million POL. Meanwhile, retail cohorts (holders of 10 to 10,000 POL) have steadily increased their balances throughout the rally.
The immediate price trajectory hinges on POL's ability to navigate key technical levels. Holding above the $0.155 support zone would suggest a healthy consolidation phase. A clean break above $0.188 would ease bearish momentum signals, while a move above $0.213 would invalidate the divergence and potentially open a path toward $0.253. Conversely, a sustained break below $0.155 could trigger a deeper correction toward $0.142 or even $0.098.
The intersection of strong network fundamentals—record usage, significant token burns, and a successful capacity upgrade—with a critical price level creates a pivotal moment for Polygon. The market's next move will be shaped by how price reacts to this technical resistance while on-chain demand remains robust.
