Polygon Faces Potential Price Decline despite DeFi Growth
Polygon (POL) is facing a possible price drop, even as its decentralized finance (DeFi) and stablecoin sectors show growth. The token was recently trading at $0.2355,slightly below its weekly high of $0.2765.
DeFi Llama data reveals that stablecoin supply on Polygon has increased to $1.98 billion this month, up from $1.67 billion. Messari reports a 23% rise in stablecoin supply in the first quarter, wiht active stablecoin wallets growing by 30%.DAI leads with a 47% market share, followed by USDC (31%) and USDT (13%).
Total value locked (TVL) on Polygon is also recovering, reaching $1.03 billion. In POL terms, TVL has surged to 4.35 billion from 1.86 billion in January. Nansen data shows weekly transactions on Polygon increased by 9% to 19.27 million, surpassing Arbitrum’s 12 million.
However, Polygon faces competition from newer layer-2 networks like Unichain, Base, and Arbitrum. Unichain, launched in February, processed over $3.8 billion in transactions.
Technically, Polygon’s price has formed a rising wedge pattern, which could signal a bearish breakdown. If this happens, the price might fall to $0.1504, about 40% below current levels. A move above $0.30 would negate this bearish view.
