Polygon burns 100M POL, holds $0.10 support as short-term momentum rises
Polygon (POL) reached a deflationary milestone by burning 100 million POL tokens. At press time POL traded around $0.108, up ~4% on the day, and flipped the EMA20 — signaling short-term bullish momentum — while daily trading volume rose ~17%. Network metrics show daily fees and revenue stabilized above $200k, with app fees over $500k, suggesting increased on-chain activity. Technical indicators: Stochastic RSI made a bullish crossover and rose to ~88, indicating strong upside momentum but with the signal line implying notable seller presence. Immediate resistance sits at the EMA20/EMA50 near $0.11 and a target of $0.12 if buyers secure a daily close above those levels; failure could see a pullback toward $0.106. Despite the burn, inflation metrics remain elevated: Stock-to-Flow Ratio fell to ~8.6 and Exchange Supply Ratio reached a monthly high (~0.003), signaling increased supply on exchanges and heightened selling pressure. Traders should weigh the bullish short-term momentum and burn milestone against persistent inflation and elevated exchange flows when sizing positions and setting stop levels.
Neutral
The news is mixed: burning 100M POL is fundamentally positive because it reduces circulating supply and signals network usage, and short-term technicals (EMA20 flip, Stochastic RSI, +17% volume) show bullish momentum that could push POL toward $0.11–$0.12 if buyers sustain strength. However, on-chain supply metrics remain concerning — Stock-to-Flow Ratio has declined and Exchange Supply Ratio hit a monthly high — indicating elevated inflation and increased selling pressure as tokens flow to exchanges. Historically, token burns often produce short-lived price bumps unless accompanied by sustained demand; similar events across altcoins have given initial rallies followed by pullbacks when exchange inflows and high supply persist. Therefore, the immediate effect is cautiously positive for short-term trades, but structural sell pressure and high inflation make the longer-term outlook uncertain. Traders should watch daily closes above EMA20/EMA50 for confirmation, monitor exchange inflows and fees/revenue trends, and use tight risk management (stops around $0.106 or position sizing) to protect against rapid reversals.