Polygon’s price has imploded after soaring to a record high of $0.7665 in December. POL has crashed by over 42% to the current $0.4420. Its market cap has dropped to $3.7 billion, making it the 36th biggest coin in the crypto industry. That is a big downfall for a project that was once in the top 15.
Pol Has Lost Market Share
The main reason the Polygon price has imploded is that the network has continued losing market share to other layer-2 networks in industries like DeFi and NFTs.
Data by CryptSlam shows that Polygon NFTs sales dropped by 87% on Monday to just $84,000. In contrast, blast sales jumped by 187% to $248,000, while Bas handled over $2.2 million. This is a big downfall for a network that has handled NFT sales worth over $1.3 billion over time.
Polygon has also lost market share in the DeFi industry. Its total value is $918 million despite having over 562 dApps in its ecosystem. In contrast, Arbitrum has over $2.95 billion in TVL, while the newly launched Base has $3.6 billion.
The two chains have passed Polygon regarding stablecoin assets, a notable development, since stablecoins are the currencies used in the blockchain industry. Polygon has $1.67 billion in stablecoins, compared to Arbitrum and Base’s $3.1 billion and $3.7 billion, respectively.
Polygon has also lost market share in the DEX industry. In the last seven days, its DEX networks generated $1.25 billion in sales, while Arbitrum and Base generated $7 billion and $14.2 billion, respectively.
This loss of market share partially explains why Polygon announced a partnership with Mukesh Ambani’s Jio. According to the deal, Jio will add its customers to the network by adding blockchain capabilities to select applications.
Polygon Price Technical Analysis
The four-hour chart shows that the POL price has crashed after peaking at $0.7670 in December. It has recently formed a descending triangle pattern with a lower side of $0.4132. A falling triangle is one of the most bearish patterns in the market.
Polygon has remained below the 50-day moving average and the 61.8% Fibonacci retracement level. Therefore, the coin will continue falling as sellers target the next key support level, $0.4132. A move below that level risks the coin moving below the psychological point of $0.400.
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