Pendle Loses Almost 50% TVL: What's Next for the Price?

Key Takeaways:

• Pendle's TVL surged to a record $6.71 billion on June 10 but dropped sharply to $3.68 billion by June 29.
• The PENDLE token saw a 30% price increase from June 11 to 23 before falling back to $4.80, a critical support level.
• Despite recent TVL declines, Pendle continues to add new assets and pools, maintaining its innovation within the DeFi space.

Pendle's TVL Hits Record High, Then Dips

As of June 10, Pendle’s total value locked (TVL) hit an all-time high of $6.71 billion. Subsequently, it gradually decreased to $6.18 billion by June 27 but sharply plummeted to $3.68 billion by June 29. 

Source: DefiLlama

Meanwhile, the PENDLE token's price surged 30% from June 11 to 23, only to retract back to $4.80, erasing earlier gains. This level at $4.80 has proven significant as horizontal support since June 11, although persistent selling pressure might lead to a downside breakout.

The broader cryptocurrency market is experiencing a sell-off, which coincided with Pendle's TVL decline amidst the maturation of several liquid staking markets within its DeFi ecosystem. Notably, matured Pendle markets by June 25 included Ether.Fi’s eETH, Renzo’s ezETH, Puffer’s pufETH, Kelp’s rsETH, and Swell’s rswETH. 

Pendle's TVL had surged earlier in 2024, fueled by liquid restaking protocols and anticipation of market airdrops like EigenLayer. Despite recent setbacks, Pendle continues to introduce new assets for users, such as short-dated eETH for July 25, long-dated eETH for December 26, and new pools starting September 26, including Ethena USDe, Symbiotic and Mellow LRTs, and Karak LRTs.

PENDLE's Price Movements: What Could Happen Next?

On May 15, the price of PENDLE began a strong upward trajectory following a steep decline, soaring 90% to reach $7.25 by May 24. This high was lower than the previous peak of $7.55 on April 12. 

After declining to a low of $4.85, higher than the May 15 low of $3.80, PENDLE rallied to $6.20 on June 23 before retracing back to the $4.80 range. The price has since formed a symmetrical triangle from its all-time high, suggesting two potential outcomes. 

Source: TradingView

A bullish scenario could see a bounce from current support levels, paving the way for a new all-time high, potentially reaching $10. Conversely, a breakout to the downside might lead to a new lower low, continuing an ABC correction pattern that began after the C wave started on May 25. 

If this correction mirrors the length of the A wave, the target could be around $3.20, corresponding to the 0.618 Fibonacci level. Confirmation of the primary outlook hinges on the direction of the breakout, with the price potentially remaining within the symmetrical triangle until it nears its apex.

FAQs:

• What caused Pendle's TVL to drop so significantly? Pendle's TVL dropped sharply due to a broader cryptocurrency market sell-off and the maturation of several liquid staking markets within its DeFi ecosystem.
• What are the potential future price movements for the PENDLE token? The PENDLE token could either bounce from current support levels and reach a new all-time high of $10 or break downwards to around $3.20, depending on the direction of the breakout.
• How is Pendle responding to the recent decline in TVL? Pendle is continuing to innovate by introducing new assets and pools, including short-dated eETH for July, long-dated eETH for December, and several new pools starting in September.

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