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Pendle Sheds Near 50% TVL From June High: What’s Behind the Crash and Will the Price Follow?

Last Updated July 2, 2024 2:33 PM
Nikola Lazic
Last Updated July 2, 2024 2:33 PM

Key Takeaways

  • Pendle TVL peaked at $6.71B on June 10.
  • PENDLE token rose 30%, but gains were erased.
  • Liquid staking market maturations coincided with its TVLs decline.

On June 10, Pendle’s total value locked (TVL) reached an all-time high of $6.71 billion. At first, it started decreasing slowly, reaching $6.18 billion on June 27, but it crashed in the next two days to a low of $3.68 billion on June 29. 

Pendle TVL
Pendle TVL | Source: DeFiLlama

Meanwhile, the price of the PENDLE token rose 30% from June 11 to 23 but returned to the same level of $4.80, whipping out all the gains made. This is a significant horizontal support level that caused a bounce on numerous occasions since June 11, but if there is selling pressure, a breakout to the downside could be seen. 

Why Did  Pendle TVL Crash? 

The broader market is down as cryptocurrencies face sell-off pressure. Pendle TVL’s decline coincides with the maturation of several liquid staking markets within its DeFi ecosystem. 

On Thursday, June 25, matured Pendle markets included Ether.Fi’s eETH, Renzo’s ezETH, Puffer’s pufETH, Kelp’s rsETH, and Swell’s rswETH.

Pendle’s TVL surged in early 2024, driven by liquid restaking protocols and anticipation of market airdrops like EigenLayer. Despite the recent drop, Pendle is introducing new assets for users, including a short-dated eETH for July 25, a long-dated eETH for December 26, and new September 26 pools, such as Ethena USDe, Symbiotic and Mellow LRTs, and Karak LRTs.

PENDLE Price Analysis 

On May 15, the price of PENDLE started to increase strongly after a sharp decline, rising 90% to a high of $7.25 on May 24. This was a lower high than its previous one of $7.55 on April 12. 

On its subsequent downturn, PENDLE fell to a low of $4.85, a higher low than on May 15, when it was $3.80. After another lower high on June 23 of $6.20, the price returned to the $4.80 area where it currently stands. 

PENDLEUSD | Credit: Nikola Lazic/Tradingview

Two potential outcomes are ahead as the price formed a symmetrical triangle from its all-time high. In a bullish scenario, we can see a bounce from its support, leading its next major uptrend to a new all-time high. If this happens, PENDLE could be headed to $10. 

Alternatively, a breakout to the downside could occur, in which case a lower low of May 15 would be made. According to this scenario, PENDLE would be in its ABC correction, out of which the C wave started on May 25. If it comes at the same length as the A wave, our target would be $3.20, which is the 0.618 Fibonacci level. 

To be certain of which outlook becomes a primary one, we first need to see the breakout direction, as the price could continue moving inside the symmetrical triangle until it reaches its apex. 

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
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