2 important thresholds determine the next steps of POL after a 12% increase

After successfully defending the support level of $0.23, Polygon (POL) rose by 12.72% to a three-month high of $0.273. During the same period, the trading volume increased by 34% to $315.7 million, while the market capitalization reached $2.8 billion.

The demand for Polygon is increasing significantly

The usage level of the Polygon network has increased significantly. According to Artemis, the number of active addresses rose from 447,000 to 665,000, equivalent to a 25% increase, indicating a strong recovery in demand.

Number of active addresses and daily transactions | Source: ArtemisAt the same time, the daily transactions recovered to 4 million, an increase of 7.9%, reflecting higher on-chain activity.

According to user X (previously Twitter) Dhee, these transactions are mainly driven by the recent upgrade of Polygon PoS USDT to the USDT0 standard. This helps Polygon become the leading network in terms of the number of USDT0 transaction addresses.

Number of transaction addresses | Source: DheeAdditionally, on August 18, data from Sealunch showed that Polygon recorded 780,000 transaction addresses, surpassing Arbitrum's 492,000.

Meanwhile, Polygon seems to be gradually becoming the stablecoin hub of Singapore, according to crypto analyst Petertherock. He observed that, in the past four months, Polygon has processed XSGD transfers worth 66 million, 88 million, 74 million, and 94 million dollars.

Source: Petertherock## The accumulation demand from buyers has increased significantly

Notably, when POL dropped to 0.23 USD, buyers stepped in.

Source: CoinalyzeAccording to Coinalyze, the buying volume reached 86.7 million compared to 70.6 million dollars in selling volume, resulting in a buy-sell spread of 16.1 million dollars. This marks two consecutive days of recorded accumulation activity.

Profit-taking activities accelerate

It is no surprise that POL has recovered after the recent correction, and holders are rushing to take profits. For example, according to Santiment, the daily on-chain trading volume ratio of profits to losses surged to 3.24 at the time of writing.

Source: SantimentA strong surge like this implies that for every 1 on-chain losing transaction, there are 3.2 profitable transactions. High profit-taking activity warns of the risk of correction, as profit-taking can trigger sell-offs.

Moreover, trading on the exchange also reflects an increasing selling trend. According to CoinGlass, the token of the Polygon network has recorded a positive net spot capital flow for two consecutive days.

Source: CoinGlassAt the time of writing, the net inflow reached 929,000 dollars, down from 2.02 million dollars the previous day, signaling an increase in the amount of money flowing in.

Momentum Indicator Bullish Signal

According to the analysis, the RSI has risen to 61, confirming bullish momentum. The directional movement index indicates a positive DI at 24 compared to a negative DI of 20, highlighting the dominance of the buyers.

Source: TradingViewIf buying activity continues, $0.28 is the next important resistance level, with the potential to rise to $0.30. Conversely, if the support at $0.195 is broken, the price could drop to $0.247.

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