The price of Pendle (PENDLE), the native token of Pendle Finance, has mirrored broader market weakness, dropping 30% since May 25th. Currently hovering around $5.13, the token reflects the recent slump in Bitcoin which fell below $68,000.
However, there are glimmers of potential bullish sentiment. A recent move by Arthur Hayes, locking up 1.65 million PENDLE tokens until September 2024, suggests confidence in the token’s future according to Lookonchain. This aligns with Hayes’ positive outlook on the liquid staking derivatives finance (LSDfi) sector, which has seen a significant 53% growth in Total Value Locked (TVL) over the past month, reaching over $6.52 billion.
Critical Support at $5.00
The key level to watch for PENDLE is the $5.00 mark. Holding above this level could favor a bullish resurgence, while a drop below could empower the bears. Technically, PENDLE broke out of a downtrend channel in mid-May, hinting at a potential uptrend. However, the recent decline aligns with a completed five-wave pattern, suggesting a pullback to key Fibonacci retracement levels.
Bullish Scenario: Higher Lows and a Potential Surge
If the decline is nearing completion, PENDLE could establish its first higher low, potentially marking the initial stages of a more significant uptrend. This scenario could see PENDLE surpass its previous all-time high, targeting values above $11 upon cycle completion. However, the daily chart currently lacks bullish signals, with the price still in a downtrend and no signs of reversal.
The RSI Indicator: A Glimmer of Hope?
The daily chart’s Relative Strength Index (RSI) sits at 40%, slightly below its median point. Interestingly, a similar RSI value was observed in March when PENDLE formed a higher low. If the decline persists, a delay or even invalidation of the bullish projection might occur, especially considering the lower May 25th high of $7.30 compared to April’s $7.50 peak. This could suggest a “double top” formation, indicating PENDLE lacked the strength to overcome the $7.50 resistance.
Also Read: Pendle Price Up Despite $10 Million Phishing Theft Spree – Urgency Grows for User Vigilance
Looking Ahead: Breakout Potential on the Horizon?
Zooming into the hourly chart, PENDLE formed a descending triangle during its downturn, finding support at the 0.618 Fibonacci level. This is a common stopping point for corrective waves, and the triangle’s three-wave structure suggests a potential reversal pattern. If this holds true, a breakout to the upside could propel PENDLE into its next major uptrend.
While PENDLE faces short-term headwinds, the recent lockup by Arthur Hayes and the growth of the LSDfi sector offer reasons for cautious optimism. Only time will tell if coin can climb back above $5 and embark on a new leg up.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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