Pendle’s price action has stalled recently, raising concerns among investors as on-chain data reveals that the Pendle team has been selling off significant amounts of the token. With this new development, questions are swirling about whether Pendle is at risk of a major price drop in the near future.

Pendle’s Price Surge Faces Pressure

Pendle, a decentralized finance (DeFi) token, had been experiencing strong bullish momentum, rising to a four-month high of $5.69 in recent days. This rally began in August when the price hit a low of $1.828, marking a nearly 200% increase over the past few months. However, this surge could be in jeopardy after significant insider selling was revealed.

On Friday, on-chain data showed that Pendle team members transferred 625,000 tokens to Binance, signaling the intention to sell. This move is usually seen as a precursor to a sale, as transferring tokens to centralized exchanges like Binance is typically one of the first steps before liquidating them.

Insider Selling Raises Red Flags

The sale of these tokens could be a profit-taking move, as Pendle has seen a substantial price increase over the past two months. However, the sheer volume of tokens being moved to exchanges raises concerns about a potential sell-off. Further data from DeFi Llama revealed that additional whale wallets have moved substantial amounts of Pendle tokens, with one whale transferring 1 million tokens worth approximately $5.6 million, and another moving 600,000 tokens valued at $3.2 million.

Combined, these sales amounted to a whopping $12.2 million worth of Pendle tokens sold in just 24 hours. This large-scale insider selling could serve as a red flag to other investors, signaling that there may be further downside potential for Pendle’s price if more holders begin to exit their positions.

Technical Analysis: A Bearish Reversal?

Looking at Pendle’s price chart, several indicators suggest the possibility of a bearish reversal. The token has been in a consistent uptrend since August, with its price moving within an ascending channel. As of now, Pendle has retested the upper boundary of this channel, which could signal a pullback if the price fails to sustain its gains.

Additionally, the recent price action has formed a “golden cross,” where the 50-day and 200-day weighted moving averages (WMAs) have crossed, signaling potential for further upward momentum. However, the selling activity from insiders could put pressure on the price, especially if Pendle closes below $5.50. A close beneath this level could trigger a shooting star candlestick pattern, signaling a potential bearish reversal.

If this scenario unfolds, Pendle could experience a significant drop, potentially retracing to the lower end of the channel at $4.80. In the worst-case scenario, a breakdown below the channel could lead Pendle to revisit its yearly low of $1.82—representing a 66% decline from its current level.

Can Pendle Avoid a Major Drop?

Despite the bearish outlook, there is still a chance for Pendle to maintain its bullish trajectory. If the price manages to break above the key psychological resistance level of $6, it could trigger further buying interest, pushing Pendle towards its year-to-date high of $7.50. This would invalidate the current bearish scenario and suggest that the uptrend is likely to continue.

However, with the ongoing insider selling and the current price action, investors should be cautious and closely monitor Pendle’s price movements over the coming days. The next few trading sessions could be critical in determining whether the bullish trend remains intact or whether a deeper correction is on the horizon.

Conclusion

Pendle’s price has been on an impressive rally, but insider selling could be a significant factor that derails the token’s bullish momentum. If the selling pressure continues, Pendle may face a sharp decline, potentially losing as much as 66% of its value. However, if the price manages to hold above key support levels and break through resistance at $6, the bullish case could remain valid. Investors should stay alert to any further developments and be prepared for potential volatility in the days ahead.