Pendle price has crawled back in the past few days, joining other cryptocurrencies like Bitcoin, Stellar Lumens, and Ethereum. The token bounced back on Monday and reached a high of $4.40, its highest point since July 2nd. It has risen by over 37% from its lowest point this week.
Why is Pendle token rising?
Pendle is a popular player in the blockchain industry that lets users earn returns that beat traditional assets like government and corporate bonds and Real Estate Investment Trust (REIT).
According to its website, weETHs has a fixed yield of 12.50% while eETH and rsETH have a yield of 7.33% and 7.04%. Other assets like USDe, sUSDe and Ether.fi earn more yields in its platform.
Over time, Pendle has attracted substantial assets in its platform. Data by DeFi Llama shows that the network’s total value locked (TVL) soared to a record high of 1.89 million ETH on June 17th.
It then crashed to the current 1.13 million ETH after hackers targeted SquareSpace domains. In a postmortem of the issue, the developers noted that the website was affected but that it was able to repel the attackers. Its protocol and users were safe and users did not lose any money.
These developments raise concern about the safety of funds secured in the DeFi ecosystem. Data released earlier this year by Chainalysis noted that while funds stolen in DeFi dropped to $1 billion in 2023, the industry was still vulnerable. Hackers stole $2.5 billion and $3.1 billion in 2021 and 2022, respectively.
Meanwhile, from a tokenomics perspective, data by CoinMarketCap shows that Pendle has over 280 million unlocked tokens or 91.2% of the total. The rest 27 million tokens will be unlocked by June 2029.
Pendle price analysis
Turning to the daily chart, we see that the Pendle token formed a double-top pattern around $7.23 and $7.52 region earlier this year. In technical analysis, this is one of the most popular bearish patterns in the market.
The token dropped below its neckline at $3.85 on July 4th and has now moved above it, which is a positive sign.
However, there is also a risk that this rebound is part of a dead cat bounce, which is a brief rebound that happens when an asset is in a downward trend.
Additionally, Pendle token remains below the 50-day Exponential Moving Average while its volume has continued falling. Therefore, there is a likelihood that Pendle token will resume the bearish trend. If the double-top pattern works as theorized, it could drop to $2 in the coming weeks.
