The supply pressure surrounding Pendle’s [$PENDLE] intensified when a major investor transferred all of its tokens, worth approximately $1.28 million, to Binance without engaging in any staking activities.
This transfer to Binance raised new distribution apprehensions, as such transactions to exchanges typically increase selling pressure in the market.
Prior to making the deposit, this investor withdrew around $1.338 million in $PENDLE from Bybit over a span of six months. Additionally, the investor recorded over $80,000 in profit while maintaining a short position with 5x leverage, which was opened at $1.52.
Notably, $PENDLE experienced a 12.47% increase at the time of this report, with trading volumes surging 121.41% to approximately $53.13 million. This suggests that demand managed to mitigate the initial supply concerns without hindering the ongoing recovery.
Three-Day Outflow Trend Tightens Available Supply
Despite the whale’s single transaction to Binance, broader exchange flows provided buyers with additional leverage. Over the past three days, $PENDLE recorded negative Spot Netflows, maintaining a streak of consistent withdrawals.
The latest data showed a negative flow of -$150.61K, meaning that withdrawals surpassed deposits across all monitored spot exchanges. This trend indicates that broader holders did not follow the whale’s lead to move their assets to exchanges during $PENDLE’s recovery phase.
Instead, total flows continued to move tokens away from trading platforms while buyers remained dominant in the spot market, as evidenced by the Spot Taker CVD indicator. Consequently, the whale’s eventual supply faced a market backdrop characterized by decreasing exchange balances due to recent flows.
Ongoing outflows are expected to reinforce this scenario, particularly as aggressive buying persists in the spot market. Yet, a shift toward prolonged inflows could diminish the current demand edge.
Increased Open Interest Brings Both Opportunity and Risk
Derivative traders have also begun increasing their positions in $PENDLE, contributing to the growing demand.
As of now, the Open Interest (OI) has climbed by 8.46% to $57.11 million, indicating rising leveraged interest in the asset’s price surge.
This uptick is significant as it suggests that traders are primarily buying rather than selling during the $PENDLE trade. However, it’s unclear whether these new positions are primarily long or short.
The whale’s existing 5x short position underscores the bearish aspect of this leveraged increase. Nevertheless, $PENDLE’s recent price climb indicates that sellers lack the control necessary to thwart the recovery. Furthermore, the rising OI could introduce more volatility, especially as prices approach critical technical resistance levels.
Strong demand in the spot market could pressure short positions if $PENDLE continues its upward trajectory. Conversely, if demand wanes, the market could face significant corrections as leveraged positions are unwound.
$PENDLE’s Price Approaches KEY Resistance
The technical landscape for $PENDLE shows notable improvement, having escaped a descending channel and rebounded from the support level at $1.245. This breakout has put an end to the downtrend that persisted since the local peak in July.
The asset then surged to around $1.49, bringing the key resistance level of $1.574 into focus. Rather than becoming trapped in a downtrend resistance zone, buyers have effectively pushed $PENDLE beyond the upper boundary of the channel.
Moreover, the MACD indicator has shown positive movement following the breakout, with the histogram increasing from negative to positive at 0.017 as of this writing. The MACD line now rests at approximately -0.016, also above the signal line, which is at -0.033.
This indicates that bullish momentum remains intact. A successful breach of $1.574 could pave the way towards major resistance at the $2.00 mark.
However, failing to surpass $1.574 may lead to consolidation, with $1.245 acting as a crucial structural support level.
Final Summary
- $PENDLE buyers successfully mitigated the whale’s impact, as spot outflows indicated a reduced supply on exchanges.
- A break above $1.574 could further enhance $PENDLE’s recovery, despite the increase in leveraged exposure in the market.