Recent supply concerns for Pendle [PENDLE] emerged when a significant investor, often referred to as a whale, transferred all their tokens worth $1.28 million to Binance without staking them.
This deposit raised alarms about potential distribution, as such transfers to exchanges typically increase selling pressure.
Prior to this deposit, the whale had withdrawn approximately $1.338 million in PENDLE from Bybit over a span of six months. The whale had also realized profits exceeding $80,000 while maintaining a 5x leveraged short position with an entry price of $1.52.
Despite these movements, PENDLE experienced a notable increase of 12.47% and trading volume surged by 121.41% to around $53.13 million. Consequently, demand absorbed the initial supply shock without hindering the upward trend.
Three-Day Outflow Trend Tightens Supply
Overall exchange activities benefited buyers, despite the whale’s transfer to Binance. PENDLE experienced three consecutive days of negative Spot Netflows, signaling a persistent withdrawal trend.
The latest data indicated a negative flow of -$150.61K, which showed that outflows were greater than inflows on all monitored spot exchanges. This three-day trend suggested that broader stakeholders did not migrate to exchanges along with the whale during PENDLE’s recovery phase.
In fact, there was a continued movement of tokens away from trading platforms, with buyers maintaining control over the spot market, as evidenced by the Spot Taker CVD indicator. This created a market environment where the whale’s potential supply faced declining exchange balances due to recent trends.
Continued outflows may further solidify this perspective, particularly as aggressive spot buying remains prevalent. Nevertheless, a shift towards sustained inflows could compromise the existing demand advantage.
Increased Open Interest Adds Potential Risks
Additionally, PENDLE witnessed derivative traders expanding their positions, contributing to the growing demand scenario.
At the time of reporting, the Open Interest (OI) surged by 8.46% reaching $57.11 million, indicating increased leveraged interest in the rising prices.
This increase was notable as traders exhibited buying behavior rather than selling during the PENDLE price movement. However, it was uncertain whether these new positions leaned towards longs or shorts.
The whale’s existing 5x short position underscored the bearish potential in this leveraged growth. Nevertheless, PENDLE’s upward price movement indicated that sellers lacked sufficient power to disrupt the recovery. Meanwhile, the increased OI may lead to heightened volatility as the price approaches critical resistance levels.
Strong demand from the spot market could put pressure on bearish stances should PENDLE continue its ascent. On the other hand, a weakening of buyer momentum might result in sharper declines as leveraged positions unwind.
PENDLE Approaches Key Resistance Level
The technical analysis of PENDLE indicates a positive trend since the price broke free from the descending channel and rebounded from the $1.245 support zone. This breakout ended the downtrend that had persisted since the local high in July.
Subsequently, the price rose to approximately $1.49, bringing the $1.574 resistance into focus as part of the recovery. Instead of getting trapped in a downtrend, buyers have effectively moved PENDLE beyond the upper edge of the channel.
The MACD indicator also showed improvement post-breakout, with the histogram transitioning from negative to positive at 0.017 at the time of reporting. The MACD line was nearing -0.016, above the signal line at -0.033.
Thus, the suggested bullish momentum remains strong. A breakthrough above $1.574 could open up the potential to reach significant resistance at the $2.00 mark.
Conversely, failure to breach $1.574 may result in consolidation, while $1.245 remains the critical support level.
Final Thoughts
- The impact of whale activities was mitigated as PENDLE buyers absorbed the supply, aided by outflows that reduced exchange stock.
- Clearing the $1.574 level could enhance PENDLE’s recovery despite the rise in leveraged positions.