Polygon Price Rallies 50% Amid On-Chain Demand, But Will it Last?

POL, the Polygon networks native token, has surged more than 50% in a week. The POL price move did not come from a single spike or headline-driven burst. Instead, it was backed by steady on-chain demand across the network. As price pauses near recent highs, the focus shifts. This is no longer about upside momentum alone. The key question now is whether POL moves into a healthy consolidation or a deeper correction. Steady On-Chain Demand Holds as Momentum Starts to Cool On-chain data shows Polygon has maintained steady usage throughout early January. Daily unique addresses have stayed firm, and transaction activity has continued to rise in line with other major EVM networks. This points to consistent network demand rather than short-term speculation. Improving On-Chain Transactions: Dune Want more token insights like this?Sign up for Editor Harsh Notariyas Daily Crypto Newsletterhere. That steady on-chain demand helps explain why POL rallied so strongly. Users are not leaving the network, and activity has not faded after the price jump. This forms a solid base under the move. Unique Addresses Remain Steady: Dune However, momentum signals are starting to diverge. The Relative Strength Index, or RSI, measures price momentum by comparing recent gains to recent losses. When RSI moves higher while price fails to follow, it suggests momentum is not translating into price follow-through. Between mid-October and early January, POLs price is forming lower highs while RSI is printing higher highs. This setup is known as a hidden bearish divergence. It does not signal panic or an immediate breakdown. Instead, it points to cooling strength and rising pullback risk after a strong run. POL Sees Hidden Bearish Divergence: TradingView This divergence only confirms if the next price candle forms under $0.174. For now, it simply warns that the rally may need time to break. Whales Reduce Exposure as Retail Keeps Buying Holder behavior helps explain how this reset could play out. Large holders have been reducing exposure ahead of the recent price pause. Wallets holding between 100 million and 1 billion POL began trimming balances around January 3. Since then, their holdings have fallen from roughly 743.6 million POL to about 708.3 million POL. The next whale tier, holding between 10 million and 100 million POL, followed later. This group started reducing balances around January 7, dropping from about 571.7 million POL to roughly 563.0 million POL. POL Whales Lose Interest: Santiment At the same time, smaller holders have moved in the opposite direction. Retail cohorts, often holding between 10 and 10,000 POL, have steadily increased their balances throughout the rally and into the current pause. Possible Retail Buying: Santiment This split matters. Whales appear to be responding to momentum cooling and chart signals. Retail participants, on the other hand, may be reacting to visible on-chain demand and rising network activity. That combination often leads to consolidation. It can also create a deeper cooldown risk if sentiment-driven buying runs into fading momentum. POL Price Levels That Define Consolidation or Deeper Correction POL price action now decides the outcome. If POL holds above $0.155, the move is likely to stay a consolidation. This level has acted as a key support zone in early November, and holding it would allow the market to absorb selling without breaking structure. A clean move back above $0.188 would ease bearish momentum signals. A stronger close above $0.213 would fully invalidate the divergence and reopen the path toward $0.253. POL Price Analysis: TradingView On the downside, a sustained break below $0.155 would shift the setup toward a reset. That opens room toward $0.142, with a deeper extension possible near $0.098 if selling accelerates. For now, POL remains supported by steady on-chain demand. The rally is not breaking, but momentum is cooling, and large holders are stepping back. Whether this becomes a simple consolidation or a deeper dip depends on how the price behaves around support.