Polygon crawls back as Polymarket volume spikes

Polygon’s price rebounded slightly on Tuesday as the crypto fear and greed index returned to greed territory.

Polygon (POL), one of the top tier 2 networks, rose 10% from this month’s low to $0.3340. It remains 25% below its September peak when it switched from MATIC to POL.

Polygon’s recovery coincided with the recovery of on-chain data. The network’s transaction volume rose to 3.1 million on Monday, according to PolygonScan, a significant increase from September’s low of 2.3 million.

Additional data revealed that the number of unique addresses on the network increased to 470 million, an increase of 190,000 from the previous day. Polygon PoS chain usage also increased slightly to 49%.

Polygon has become a major player in the blockchain industry, largely thanks to Polymarket, a platform that has gained popularity as a prediction market. The largest prediction market on the network has over $2.6 billion in assets, data shows.

Data from DeFi Llama Polymarket shows over $2.08 billion in October, a significant increase from $533 million in the previous month. The 24-hour trading volume reached $118 million and this trend may continue in the coming days.

Polymarket operates on Polygon because users must deposit USD Coin (USDC) into the Polygon network to participate in trading.

However, further data shows that the Polygon network is losing market share in key areas of the blockchain industry. For example, it has over $1.12 billion in total value locked in the decentralized finance sector, making it the third largest layer-2 network after Base and Arbitrum.

Polygon has also seen a decline in its share of the decentralized exchange industry. DEX volume in October was $5.1 billion; this was much lower than Base’s $25 billion and Arbitrum’s $15 billion. This decline is notable because Polygon was one of the first mainstream layer-2 networks.

Polygon tries to save POL chart by TradingView

The 4-hour chart shows the Polygon token falling to $0.3050 on October 25 and rising to $0.3330, its highest level since October 25.

It remains below the 23.6% Fibonacci retracement level and the 50-period and 25-period Exponential Moving Averages.

The two lines of the MACD indicator have formed a bullish crossover pattern, which is a commonly observed bullish signal. Additionally, the Relative Strength Index is pointing up and has moved to the neutral level of 50.

Therefore, Polygon’s price will likely continue to rise as the bulls target the 50% retracement level at $0.3750.