Pendle Support Tested After Polychain Exit

December 14, 2025 Marcus Tanaka 0 Comments

Pendle support has become a key concern for traders after strong selling pressure pushed the token close to the $2 level. Recent price action shows that the market is struggling to find stability following a major exit by Polychain Capital. This development has raised questions about whether Pendle can hold its current support or if further downside is likely. By looking at on-chain activity, technical indicators, and market sentiment, it becomes clearer why Pendle support is being tested so heavily.

Pendle is a decentralized finance protocol focused on yield trading, and its token has seen strong interest in the past. However, recent weeks have been dominated by sellers. One of the main triggers behind this weakness was Polychain Capital’s decision to exit its PENDLE position at a significant loss. This move shifted sentiment quickly and added pressure to an already fragile market structure.

Pendle Support shown on a 1-month price chart displaying PENDLE’s downward trend and increased volatility near the $2 level

The one month price chart for PENDLE highlights a clear downward trend, with the token forming lower highs and lower lows over the observed period. Price action shows sustained selling pressure, aligning with the recent loss of momentum seen across the market. The chart also reflects increased volatility as PENDLE approached the $2 level, a zone that has acted as a key area of interest for traders. This visual trend supports broader market data indicating that sellers have remained in control, while buyers have shown limited strength in defending higher price levels during the past month.

Pendle Support Weakens After Polychain Exit

Polychain Capital accumulated more than four million PENDLE tokens over time at an average price well above current levels. When the firm decided to sell its holdings near $2.19, it locked in a loss of roughly $4 million. Such a large realized loss from an institutional player often signals reduced confidence in short term price recovery.

This exit increased the available supply of PENDLE on the market, making it harder for buyers to defend Pendle support. Institutional selling tends to have an outsized impact because it often influences how retail traders perceive risk. Once Polychain exited, market participants became more cautious, leading to lower buying activity.

Persistent Selling Pressure Challenges Pendle Support

Selling pressure did not stop with Polychain. Market data showed a negative buy sell delta for several consecutive days. This means that sell orders consistently outweighed buy orders, reinforcing the downtrend. When this pattern continues over time, it weakens support levels and discourages aggressive buying.

Whale activity also played a role. Large holders continued to move tokens, but instead of accumulating, much of this activity appeared to be redistribution. Redistribution by whales usually suggests that confidence is low and that holders are reducing exposure. This behavior makes Pendle support harder to maintain because it adds steady sell pressure to the market.

Technical Indicators Reflect Weak Pendle Support

Technical indicators further confirm the fragile state of Pendle support. The Relative Strength Index on the daily chart dropped near 36, which places the token close to oversold territory. While oversold conditions can sometimes lead to short term relief rallies, they also highlight how strong the selling momentum has been.

Another indicator, the Directional Movement Index, showed weak bullish strength. The positive directional line remained low, suggesting that buyers lack momentum. As long as bearish pressure dominates, price recovery attempts are likely to be limited. These signals suggest that Pendle support may not hold unless buyer interest increases significantly.

The Importance of the $2 Pendle Support Level

The $2 level has emerged as a critical psychological and technical support zone. Price recently dipped close to this area before stabilizing slightly above it. If Pendle fails to hold $2, the next potential support could be around $1.80. A move below $2 would likely trigger additional selling, especially from short term traders.

On the upside, Pendle would need to reclaim the $2.25 area to show signs of strength. A move above this level would indicate that buyers are stepping back in and defending higher prices. Without this shift, the market structure remains bearish and Pendle support remains vulnerable.

Market Sentiment Remains Cautious

Market sentiment surrounding Pendle support is currently cautious. Institutional behavior has played a major role in shaping this outlook. When a large investment firm exits at a loss, it often creates uncertainty among other investors. This uncertainty can slow down buying activity and increase fear of further downside.

Retail traders are also reacting to broader market conditions. In uncertain market environments, traders tend to reduce risk exposure. As a result, even fundamentally strong projects can struggle to attract buyers. Pendle is facing this challenge as confidence weakens across the DeFi sector.

What Could Strengthen Pendle Support

For Pendle support to strengthen, several changes would need to occur. First, selling pressure must ease. This would require fewer large sell orders and signs that whales are holding rather than distributing tokens. Second, buyers would need to step in with stronger volume to defend the $2 level.

A shift in broader market sentiment could also help. If overall crypto conditions improve, risk appetite may return, providing support for DeFi tokens like Pendle. Technical confirmation, such as a rising RSI and stronger bullish momentum, would further support a potential recovery.

Final Thoughts on Pendle Support

Pendle support is currently under significant stress due to sustained selling pressure and a major institutional exit. The $2 level remains the most important price point to watch in the short term. While oversold indicators suggest that a bounce is possible, the overall trend remains bearish unless buyer confidence returns.

Traders should closely monitor price behavior near key levels and watch for changes in momentum. Until clear signs of accumulation appear, Pendle support is likely to remain fragile and sensitive to further market pressure.

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