100 million POL tokens burned: Can Polygon extend gains?

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Polygon gains 7.25% today to $0.1095

Highlights

Polygon has completed the permanent burn of 100 million POL tokens, cutting its total supply by about 1%.
The new burn mechanism sends tokens from network fees to a dead address, directly lowering circulating supply and increasing scarcity.
POL trades with bullish momentum above key moving averages, gaining 7.25% on the day with a projected range of $0.1062 to $0.1148.

Supply reduction and burn drive new buying momentum

Polygon has completed the permanent burn of 100 million POL tokens, representing about 1% of its total supply, according to Polygon Foundation CEO Sandeep Nailwal. By sending tokens accumulated from network fees to a dead address under a new burn system, Polygon has effectively reduced the circulating supply and heightened scarcity for holders. This direct reduction in supply supports buying interest and aligns with current momentum in POL.

Uptrend strength as multiple indicators signal buy conviction

On the technical front, POL/USD is trading above the MA-20 at $0.1074 and MA-50 at $0.1051 on the hourly chart, with price also above the MA-200 at $0.0881 on the daily timeframe. The Ichimoku Kijun at $0.1055 serves as an immediate support level. MACD indicates a Strong Buy, while the ADX provides a Buy signal. The RSI stands at 61.5 (Buy), and the CCI also leans positive. Meanwhile, Stoch RSI reads as Oversold, suggesting divergence with the otherwise strong upward momentum; Bull/Bear Power shows clear buyer dominance intraday, while the Awesome Oscillator remains neutral.

Bullish breakout risk as consolidation meets technical support

Looking ahead, POL is expected to consolidate between $0.1062 and $0.1148 over the next few trading days, with high odds of an upward breakout given the current technical setup and strong momentum. A bullish scenario unfolds if price decisively breaks above resistance, targeting further gains. Conversely, a drop below immediate support at $0.1055 would increase the risk of a potential short-term reversal.

Anton Kharitonov, expert at Traders Union, sees the recent 100 million POL token burn as a clear supply-side catalyst but remains cautious on the sustainability of gains. He notes momentum is supported by strong technical signals and immediate demand, yet emphasizes that overstretched indicators and prevailing volatility limit conviction. Base case remains consolidation within $0.1062 to $0.1148, with a possible breakout if resistance is taken. "Unless POL establishes above $0.1148 on strong volume, I remain defensive and would avoid chasing further upside here."

Previously it was reported that Polygon faced persistent downside risk, with selling pressure dominating as traders awaited the impact of its planned token burn. The latest bullish price action and confirmation of the completed supply reduction now shift the outlook, with the next key level for traders to monitor being a decisive move above current resistance to validate further upside potential.

Source of Data: POL Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.