Polygon (POL) is hovering at a crossroads, can long positions break through the 0.29 USD resistance level? | POL price prediction

Polygon (POL) Token is currently at a critical crossroads. Although it shows a strong bullish outlook on the daily chart and is expected to rise steadily in the coming weeks, in the short term, threats from nearby liquidity areas and potential fluctuations of Bitcoin (BTC) may pose challenges for long positions. Technical Analysis indicates that POL has completed a bullish structure breakout and has gained sustained buying pressure; however, the liquidation heatmap and technical indicators also warn of potential pullback risks.

Bullish structure appears, long positions are strong

The market structure of the Polygon Token experienced bullish breakouts in both July and August. The most recent one occurred on August 31, providing a solid technical foundation for the continued rise of POL. Based on the Fibonacci extension levels drawn from the rebound in June to July, POL's next medium-term price targets are 0.287 USD, 0.313 USD, and 0.3255 USD.

The market's bullish sentiment has received strong support from the Chaikin Money Flow (CMF) indicator. This indicator has been above +0.05 for most of July and August, indicating that buying pressure remains strong. As of the time of writing, the CMF is at +0.15, further confirming the bullish pressure. The combination of structural breakthroughs and positive momentum makes the possibility of POL continuing to rise very high.

Beware of Market Fluctuation and Liquidity Traps

Although the structure of POL itself is bullish, the overall dynamics of the crypto market may still pose a threat. Currently, Bitcoin ** (BTC)** is brewing a potential short squeeze, accumulating a large number of short liquidations above 110,000 USD. If the price of Bitcoin experiences significant fluctuations, this fluctuation could spill over into the altcoin market, including POL, adding additional pressure to its rise.

In addition, the Liquidation Heatmap also warns of potential pitfalls for POL long positions (especially those using leverage). Over the past two weeks, the bidirectional liquidity around the POL price has increased. If Bitcoin weakens, POL may pull back to the liquidity zone of 0.27 USD before attempting to rise again.

Technical indicators send cautious signals

(Source: TradingView)

The technical indicators have also issued cautious signals. The MACD indicator has shown a bearish crossover, which typically indicates that momentum is weakening or a short-term pullback may occur. The RSI indicator is also trending downward, suggesting that buying pressure is diminishing. If this indicator continues to decline, the price may pull back to the support area around 0.26 USD before attempting a new rebound.

It is worth noting that the surge in trading volume consistently aligns with price peaks, indicating that whenever POL approaches critical levels, market interest and activity significantly increase. This dynamic underscores the importance of closely monitoring these technical areas, as they may set the stage for price to decisively break through resistance or pull back to retest lower support levels.

Key Decision Point: Continue to Pump or Healthy Pullback?

Polygon (POL) is approaching the key resistance level of 0.28 USD, which is a critical moment determining its next move. As analysts GemXBT and OLUWANIFEMI emphasized on the social media platform X, if buyers can maintain control and convincingly break through this barrier with significant trading volume, it could pave the way for further pump.

However, OLUWANIFEMI also warned that not all signals point to an immediate strong trend. If the upward momentum begins to weaken, he expects the price to pull back healthily to the support area of 0.26 USD. He emphasized that a retest of this level would not harm its broader upward trend, but rather provide the market with an opportunity to "catch its breath" and "reset," building momentum for the next rise.

Conclusion

The price trend of Polygon (POL) is at a delicate moment of a tug-of-war between long positions and short positions. Its internal structure and capital flow show strong bullish potential, indicating a possible steady rise in the coming weeks. However, traders must remain vigilant and pay attention to the market dynamics of Bitcoin, as well as the performance of key resistance levels such as $0.29 and $0.295. Ultimately, whether Polygon will continue its upward trend or experience a "healthy" pullback to recharge will depend on whether long positions can gain the upper hand in the upcoming fluctuations. Savvy traders will closely monitor this area to prepare for the next major movement.