Polygon coin retreated and flipped a key support level as its ecosystem slowdown persisted.
Polygon (POL) dropped to $0.3910 on Tuesday, marking a decline of 47% from its December 2024 highs.
Nansen data shows that active addresses on the Polygon network have fallen by 12% in the last 30 days, dropping to 5.96 million. This figure is significantly lower than Base, the largest layer-2 network, which recorded 21.7 million active addresses in the same period.
While Polygon’s transactions increased by 7% to 91.5 million, its fee revenue plunged 38% to $835,000. This underwhelming performance contrasts sharply with Base, which handled over 218 million transactions and generated $15.5 million in fees.
More data shows why the Polygon network has struggled this year. The total value locked in its DeFi ecosystem has dropped to $842 million, much smaller than Base’s $3.41 billion and Arbitrum’s $3 billion.
Polygon’s DeX ecosystem is also lagging. Weekly trading volume fell by 20% to $1.2 billion, while Base, a relatively new network, handled $10.7 billion in the same period.
A similar trend has emerged in the NFT market, where Polygon once had a strong presence. According to CryptoSlam, Polygon NFT sales dropped 71% in the last 30 days to $24.8 million, while Base surged by 388% to $22.7 million in sales.
Polygon’s weak performance explains why it was removed from the Lido DAO liquid staking in December.
Polygon price pattern points to more downside
The four-hour chart shows that the POL token peaked at $0.7671 after its conversion from MATIC last year. Most recently, it formed a descending triangle pattern, whose lower side was at $0.4138. It failed to drop below that level several times since December last year. A falling triangle is a popular bearish sign.
Polygon has also dropped below its 50-period moving average, reinforcing a bearish outlook. The path of least resistance appears downward, with the next key support level to watch at $0.3425, the token’s lowest swing on November 15.
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