Polygon's native token, POL, has experienced a sharp decline, erasing its year-to-date gains and falling to around $0.095 from a January high of $0.1853. This drop coincides with a broader market downturn affecting Bitcoin and altcoins. The price action has formed a technical double-bottom pattern, suggesting a potential bullish reversal, with analysts eyeing a rebound target near $0.1500 if key support holds.
The price weakness comes as Ethereum co-founder Vitalik Buterin recently questioned the long-term necessity of some Layer-2 networks, noting that Ethereum's own scaling improvements have progressed faster than some L2 solutions. He argued that L2 networks must solve specific challenges and focus on key niches to survive.
Despite the price pressure, Polygon's fundamentals in the payments sector show significant strength. The network has the second-highest number of monthly USDC addresses after Solana, and its peer-to-peer stablecoin transfer volume has surged to over $39 billion. Major payment processors are driving substantial volume on the chain: Tazapay handled over $687 million in January, Revolut processed over $50 million, and Stripe, Paxos, and Moonpay are also active users.
This growing payment activity has led to a surge in network fees and an increased token burn rate. Data from Nansen shows double-digit growth in network fees in recent months. Technically, POL is testing a crucial support zone near $0.085. A sustained breakdown could see the price fall toward $0.075, while holding support could fuel a rebound toward $0.105.
