Polygon has fallen nearly 40% from its yearly high in tandem with a market-wide weakness. Can it recover from its losses now as its stablecoin market and app revenues surge?

According to data from crypto.news, the Polygon ($POL) price fell over 50% from its January high to a yearly low of $0.088 on Feb. 11. This occurred amid a broader market pullback triggered by massive liquidations across leveraged markets as Bitcoin fell below multiple key support zones due to macroeconomic and geopolitical stress.

$POL has since bounced back and remained in consolidation between $0.100 and $0.115.

Potential catalysts for Polygon price

The Polygon network is showing signs of strength, which may position it for a breakout

First, its on-chain stats have grown significantly stronger over recent weeks. Data from DeFiLlama shows that the total supply of stablecoins on the network has surged to $3.26 billion from the $2.4 billion seen at the beginning of February.

At the same time, the weekly revenue generated by DeFi apps on the network has also soared by nearly 70% within the period.

A stronger stablecoin supply and weekly revenue suggest a surge in activity and liquidity, which is a healthy sign for a network and could likely attract more institutional capital.

Second, Polygon’s aggressive token burn strategy is also helping support its price gains. It has recently completed burning over 100 million $POL tokens. As tokens are burnt, they are permanently removed from the circulating supply, driving scarcity and providing an accessible bullish narrative for short-term traders.

Third, the daily chart shows that the Polygon price is close to confirming a bullish crossover between the 50-day and 100-day moving averages. Bullish crossovers are typically followed by sustained rallies once confirmed.

Polygon price is close to confirming a bullish crossover on the daily chart — Feb. 25 | Source: crypto.news

Key levels to watch

For now, the next overhead resistance level lies at $0.122, which is the strong pivot reverse level of the Murrey Math lines. Bulls must reclaim this level to confirm a trend reversal.

Subsequently, bulls can then try to push the token all the way up to its January high at $0.184, which would mark a roughly 64% rally from its current price of $0.112.

On the contrary, failure to hold the ultimate support level of the Murrey Math lines at $0.097 will result in a drop back to its yearly low of $0.088.