Polygon [POL] is increasingly focused on strengthening its underlying fundamentals, with recent efforts centered on tightening token supply and reinforcing long-term value dynamics. One of these efforts involved burning 25.9 million POL to cut circulating supply by roughly 3% by year-end.
Despite these announcements though, investor reaction has remained muted. At the time of writing, POL’s price was down 6.46% – A move largely aligned with the broader market’s underperformance rather than token-specific weakness.
Trading activity cooled down too, with the volume falling by 26% to $108 million. This can be seen as evidence of reduced momentum and cautious positioning among traders.
POL tightens supply through token burn
Polygon has continued to refine its tokenomics framework, with the latest adjustment coming through a protocol-level token burn. The mechanism permanently removes tokens from circulation, reducing available supply in the market.
The intent is clear – Constrain supply while network usage expands, allowing demand to gradually exert upward pressure on price. While the impact is yet to reflect meaningfully on POL’s valuation, the structural shift since has been notable.
Source: Blockworks
The latest burn removed approximately 0.24% of the circulating supply, equivalent to about 25.7 million POL. In a post on X, Polygon founder and CEO Sandeep Nailwal confirmed that additional burns are planned in the months ahead.
Nailwal also emphasized Polygon’s focus on value accrual, highlighting a direct link between network activity and token economics.
Network data seemed to support this narrative too. In fact, daily transactions on Polygon surged to 6.6 million in the last 24 hours – The highest level recorded in over a month.
Rising transaction counts suggest growing demand for blockspace, increasing POL usage per transaction. If sustained, this dynamic could gradually translate into stronger token performance.
Capital inflows reinforce the bullish case
Capital flow metrics further strengthened POL’s outlook. For example – Bridge Netflow data revealed that Polygon recorded $7 million in net inflows over the past day, ranking second among major chains behind only Base and Ethereum.
Bridge Netflow tracks liquidity moving between blockchains. A closer breakdown highlighted that more than 90% of these inflows originated from the Ethereum ecosystem, signaling sustained capital migration towards Polygon.
Elevated capital concentration on the network increases the likelihood of rotation into POL. Particularly as investors seek exposure aligned with on-chain activity.
Source: CoinGlass
Centralized exchanges have also seen steady accumulation. Spot traders have gradually increased their exposure to POL, with net inflows totaling $4.2 million over the past week.
A further $200,000 flowed in over the last 24 hours alone. Combined on-chain inflows and spot accumulation could provide meaningful price support once broader market conditions stabilize.
Breakout requires follow-through
On the daily charts, POL recently pushed above a descending resistance line that had suppressed price action for several weeks.
The breakout, recorded on Monday, pointed to a potential trend shift. Historically, reclaiming such a resistance often precedes higher highs when confirmed. However, Tuesday’s candlestick printed bearish, pulling the price lower instead of extending the upward move.
Source: TradingView
Despite the pullback, POL continues to trade above the former resistance level, keeping the bullish structure intact. As long as the price holds above this zone, the probability of a rebound will be elevated.
A sustained breakdown below it, however, would weaken the setup and delay any meaningful recovery.
Final Thoughts
- Polygon has burned 25.9 million POL, part of a broader plan to cut circulating supply by year-end.
- Capital inflows remain dominant on-chain, with steady spot-market accumulation reinforcing the trend.
Source: https://ambcrypto.com/polygon-what-should-traders-expect-from-its-price-after-25-9m-pol-burn/
