Polygon (POL) price prediction: After an annual big dump of 46%, it has fallen into a liquidity crisis, with the key demand zone of $0.2264 becoming a make-or-break line for bulls and bears.

The native token of Polygon, POL, has fallen another 6% in the last 24 hours, continuing its annual decline of 46%. Both on-chain and exchange liquidity are being drained, with weekly active addresses sharply reduced to 2.2 million. The derivatives market has seen a $9.88 million position closed, intensifying bearish sentiment, while the technical analysis indicates that the demand zone of 0.2264-0.2318 may trigger a fourth rebound.

Continuous outflow of liquidity across markets

(Source: Artemis)

Polygon is currently experiencing a complete liquidity withdrawal. On-chain data from Artemis shows a net outflow of $105,900, indicating that investors are cross-chain transferring POL and reallocating to assets with higher expected returns. The same trend is evident in the exchange spot market, with $263,000 POL sold in the last 24 hours.

The derivatives market simultaneously released bearish signals, with open contracts decreasing by 9.88 million USD. Analysts warn that if capital outflow continues across the market, it will exacerbate the downward pressure on POL prices and create a vicious cycle.

On-chain activity reaches warning threshold The network's usage activity continues to decline. The number of active addresses per week has dropped to 2.2 million, and the weakening of address activity directly leads to a decrease in POL's practical demand. More severely, the inflow of new users has significantly shrunk, with only 99,000 new users added in a single day, reflecting a sharp drop in market interest in this asset.

If the on-chain adoption rate, especially the trend of new user entry, does not reverse, it may create additional market supply pressure, further impacting the already fragile price system.

Key technical area becomes the focus of long and short battles

(Source: TradingView) Despite the pessimistic market sentiment, technical charts indicate that a rebound opportunity still exists. The POL price has fallen into the key demand zone of $0.2264 - $0.2318, which has successfully triggered rebounds three times since August. During the fourth test, the price has shown bullish recovery signs, suggesting a potential rebound may occur.

However, it should be noted that if the selling pressure continues, this support level may fail - the strength of the support diminishes as the number of tests increases, which means that the market may lack sufficient buying power to absorb the ongoing selling.

[Conclusion] Polygon is facing a dual test of fundamentals and technicals, with shrinking on-chain activity and liquidity outflow forming a lethal combination. Although historical data shows a rebound probability in the demand zone of $0.2264, continuous capital outflow may exhaust market buying momentum. Investors should pay close attention to the effectiveness of this key support area; if it is lost, it may open up deeper downward space.