Will Pendle Maintain its $2 Support After Polychain's $4 Million Loss?

Pendle (PENDLE) has been struggling to maintain its value, experiencing a steep decline to a low of $2.02. The recent exit of Polychain Capital, which sold its holdings at a loss of nearly $4 million, raises questions about Pendle's future. As selling pressure continues, the coin's ability to hold the $2 support level is in jeopardy.

Key Takeaways

Pendle has seen a significant decline, recently trading at $2.17, down 4.1% for the day and 18.5% for the month.
Polychain Capital recently sold its Pendle holdings for around $2.19, resulting in a loss of approximately $3.99 million.
Continuous selling pressure indicates that bears are dominating the market, and if the downward trend persists, Pendle may break below the crucial $2 support level.

Pendle

Analysis of Pendle's Current Position

Pendle has faced a steady downtrend since a rejection near $6 more than six months ago. Currently, the price hovers around $2.17, reflecting a 4.1% decline in just one day and almost an 18.5% drop over the past month. This prolonged bearish trend has prompted long-term holders, including institutional investors, to contemplate selling.

Polychain's Departure at a Loss

Despite some brief price recoveries in the last month, large investor activity has remained largely focused on selling. Data from CryptoQuant indicates that Big Whale Orders have consistently been active for nearly 30 days, but predominantly in a distribution context.

Pendle Spot Average Order Size

One significant player, Polychain Capital, recently sold its Pendle tokens after several months of holding. According to on-chain analytics from EmberCN, Polychain initially purchased around 4.114 million PENDLE between March and September at an average price of about $3.16, totaling approximately $13 million.

Polychain Deposits

However, about four months later, Polychain exited its position at a price of around $2.19, resulting in an estimated loss of $3.99 million. Such exits often indicate a broader market shift, as confidence wanes amidst unfavorable price movements.

This trend wasn't limited to Polychain. Data from Coinalyze revealed that Pendle has experienced a negative Buy Sell Delta for nine consecutive days, indicating that sell orders have consistently outnumbered buy orders, reinforcing a trend of downside pressure.

Pendle Buy Sell Volume

Will Pendle's $2 Support Hold?

AMBCrypto has identified that Pendle remains locked in a downward trajectory, with sellers continuing to dominate the pricing landscape. The Relative Strength Index (RSI) has dipped to 36, suggesting that Pendle is nearing oversold territory.

Pendle RSI & DMI

Additionally, the Directional Movement Index shows a drop in the Positive Directional Index to 13, highlighting considerable bearish momentum. This trend typically indicates that the downward movement is likely to continue.

If the selling pressure persists, Pendle may soon lose its $2 support level, potentially dropping to the $1.80 range. To stabilize market sentiment, the price would need to rise above $2.25, signaling renewed support from buyers. Holding above this critical level could pave the way for a recovery attempt toward $2.50.

Final Thoughts

As Pendle grapples with significant market pressures and the recent exit of a major player like Polychain, the cryptocurrency's ability to maintain its $2 support is in question. Investors should stay vigilant, watching for signs of changing momentum and potential recovery opportunities.