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Pendle (PENDLE) is facing significant uncertainty following the withdrawal of major investor Polychain Capital, which reportedly exited its position at a substantial loss of nearly $4 million. This move by a prominent institutional player has added to the existing bearish pressure on the token, raising concerns about its short-term price trajectory and the resilience of key support levels.
Key Takeaways
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Polychain Capital sold its Pendle holdings, incurring an estimated $3.99 million loss.
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The exit occurred after Polychain held the tokens for several months, accumulating them at an average price of $3.16.
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Pendle has been trading in a steep downtrend, recently hitting a low of $2.02.
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On-chain data indicates sustained selling pressure, with sell orders consistently outweighing buys.
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Technical indicators suggest continued bearish momentum, with the $2 support level being a critical point to watch.
Polychain Capital's Exit
Polychain Capital, a well-known venture capital firm in the crypto space, has divested its entire Pendle position. The firm had accumulated approximately 4.114 million PENDLE tokens between March and September, with an average acquisition cost of around $3.16 per token, amounting to an investment of roughly $13 million. However, approximately four months later, Polychain sold these holdings for about $2.19 each, resulting in an estimated loss of $3.99 million.
This loss-based exit by a significant institutional investor often signals a weakening of conviction and sentiment within the market. Such actions can contribute to further downward pressure as other market participants react to the perceived negative signal.
Sustained Selling Pressure on Pendle
On-chain analysis reveals that the selling pressure on Pendle has been persistent. Data from CryptoQuant indicated a consistent pattern of "Big Whale Orders" leaning heavily towards distribution for nearly 30 consecutive days. Furthermore, Coinalyze data showed a negative Buy Sell Delta for nine straight days, confirming that sell orders have consistently outnumbered buy orders on the spot market. This sustained selling activity reinforces the prevailing bearish trend.
Technical Outlook and Support Levels
Technically, Pendle has been trading within a steep downtrend since facing rejection nearly six months ago, eventually dropping to a low of $2.02. At the time of reporting, the token was trading around $2.17, reflecting a daily decrease of 4.1% and a monthly decline of nearly 18.5%.
The Relative Strength Index (RSI) on the daily chart has fallen to 36, placing Pendle in near-oversold territory. However, the Directional Movement Index (DMI) shows the Positive Directional Index (PDMI) sliding to 13, indicating strong bearish momentum. This alignment typically favors the continuation of the existing trend.
Analysts are closely watching the $2 support level. A sustained breach below this crucial psychological and technical level could open the door for further declines, potentially targeting the $1.80 zone. For sentiment to stabilize and a recovery to begin, Pendle would need to reclaim the $2.25 level, signaling renewed buyer defense, with a sustained hold above this point potentially paving the way for a move towards $2.50.
Sources
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