Polygon price at risk of a 40% crash despite DeFi, stablecoin gains

Airdrop Is Live CaryptosHeadlines Media Has Launched Its Native Token CHT. Airdrop Is Live For Everyone, Claim Instant 5000 CHT Tokens Worth Of $50 USDT. Join the Airdrop at the official website, CryptosHeadlinesToken.com Polygon price is at risk of a significant drop after forming a bearish technical pattern—despite growth in its decentralized finance and stablecoin activity.Polygon (POL) token was trading at $0.2355 on Thursday, a few points below this week’s high of $0.2765. DeFi Llama data shows that the amount of stablecoins in its ecosystem has continued to rebound this month. Stablecoin supply has risen to $1.98 billion, up from the year-to-date low of $1.67 billion. Meanwhile, a report by Messari noted that the stablecoin supply on the network jumped by 23% in the first quarter, while the number of active stablecoin wallets rose by 30%. DAI holds a 47% market share on Polygon, followed by USD Coin (USDC) and Tether (USDT), with 31% and 13% shares, respectively.Additional data shows that total value locked on the Polygon network is making a slow recovery. TVL stands at $1.03 billion, up from the year-to-date low of $736 million. Growth has been even more notable in POL terms, with the figure rising to 4.35 billion POL from 1.86 billion POL in January. Polygon stablecoins and TVL | Source: DeFi LlamaNansen data also shows that the number of weekly transactions on Polygon rose by 9% to 19.27 million, higher than Arbitrum’s (ARB) 12 million.Decentralized exchanges transactions on Polygon rose by 48.46% in the last seven days to almost $1 billion. Polygon’s main challenge is that it has continued to lose market share to newer layer-2 networks like Unichain, Base, and Arbitrum. For example, Unichain, which was launched in February, handled over $3.8 billion in transactions. Polygon price technical analysisPolygon chart | Source: crypto.newsThe daily chart shows that POL bottomed at $0.1500 in April and then rebounded as the broader crypto market rallied. The token has nearly retested key resistance at $0.2863, the lowest level from November last year.However, the coin has slowly formed a rising wedge pattern, defined by two upward-sloping and converging trendlines. This pattern often signals a potential bearish breakdown when the price nears the point of confluence.If a breakdown occurs, Polygon could fall to the next support level at $0.1504, the April low, which is about 40% below the current price. A decisive move above the $0.30 resistance level would invalidate the bearish outlook. Source link