NOIDA (CoinChapter.com) — Polygon (POL) recently retraced 47% in Q3 2024, settling at a market capitalization of $2.9 billion. Despite this sharp decline, the network’s technical and ecosystem developments signal that POL might be criminally underbought.
With significant upgrades, including the Ahmedabad and Eggfruit updates, alongside rapid ecosystem expansion, Polygon’s growth potential remains intact. Bullish indicators suggest POL might be poised for a strong rebound, with key innovations setting the stage for a potential bull run.
1. Polygon’s Expanding Ecosystem Shows Resilience
Polygon’s ecosystem has shown remarkable resilience, even amid market downturns in Q3 2024. The stablecoin market capitalization on Polygon PoS increased by 10% QoQ, reaching $1.9 billion, with USDC supply surging by 42% to $880 million. The rise reflects the growing demand for stablecoins and highlights Polygon’s increasing relevance in decentralized finance (DeFi).
Polymarket, a prediction market built on the Polygon network, experienced exponential growth during the quarter. With over $3 billion in election-related bets and an impressive 140,000 new accounts added in October alone, Polymarket continues to demonstrate Polygon’s unique value in real-world applications.
Furthermore, the tokenization of real-world assets (RWAs) gained traction on the network, with platforms like Courtyard tokenizing collectible cards and DIMO enabling car data monetization.
Despite a general slowdown in gaming activity, other sectors, including DeFi and NFTs, saw increased engagement, signaling diverse growth across the ecosystem. Overall, Polygon’s expanding ecosystem presents bullish cues that the market has yet to fully price in, providing a strong foundation for future growth.
2. Technical Upgrades Could Help In Long-Term Growth
Polygon’s technical upgrades in Q3 2024 have further solidified its long-term potential in the Layer-2 space. The Ahmedabad upgrade, which increased contract size limits and initiated the MATIC-to-POL transition for gas and staking, marked a critical step toward enhancing the network’s performance.
The network’s focus on zero-knowledge (ZK) technology has led to advancements like the Eggfruit update on zkEVM, which doubled the zkCounters, improving transaction throughput and security.
Moreover, Polygon’s $5 million investment in Verifiable Processing Units (VPUs) aims to boost efficiency across zkEVM and AggLayer systems, making the network even more attractive for developers and enterprises.
These VPUs will power Polygon’s zk-proof systems, helping to improve cross-chain interoperability and scalability.
Despite these significant upgrades, POL’s market cap has fallen to $2.9 billion due to the ongoing MATIC-to-POL transition. However, with zkEVM upgrades and further innovations, the network is well-positioned for future growth, offering substantial upside for long-term investors who recognize its technological advancements.
3. POL Price Forms Bullish Setup
Moreover, the POL USD pair has formed a technical setup called the ‘falling wedge.‘
Two converging downward trendlines that connect lower highs and lower lows form the falling wedge, a bullish reversal. The narrowing structure shows that, despite the ongoing downtrend, the bearish momentum is gradually weakening, often preceding an upward breakout.
The key feature of a falling wedge is that the slope of the lower trendline is steeper than that of the upper trendline, indicating that selling pressure is dissipating. When the breakout occurs—typically upward—it signals buyers taking control.
To estimate the potential price target after a breakout, traders measure the vertical distance between the widest points of the wedge and project that range from the breakout point upwards.
According to technical analysis rules, the POL USD conversion rate might rally nearly 100% from its current level to reach the pattern’s projected target of around $0.65.
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