Eastern Standard Time, December 30, PENDLE has seen a continuous price correction over the past week, with a significant cooling from its recent highs. On-chain trading and governance participation have weakened simultaneously, drawing market attention to the sources of selling pressure and emotional turning points. This change marks a new phase in sentiment surrounding yield splitting and yield derivatives, as funds begin to withdraw from previously crowded trades, with clear signs of profit-taking and position reduction.

Order Flow and Price Performance: From Active Buying to Net Selling

● News Driven:

● Price Correction Rhythm: Research Brief shows that since PENDLE reached a temporary high in mid-December in the Eastern Standard Time zone, the maximum correction has exceeded 30%, with daily volatility ranges significantly narrowing, indicating a weakened willingness to chase prices. Recent daily declines have mostly concentrated in the 5%–10% range, but the accumulation of consecutive bearish candles has formed a more impactful downward trend.
● Volume Cooling: Compared to the previous major upward wave's increased volume, the daily trading volume over the last few trading days has fallen back about 40%–50% from its peak (the Brief did not provide exact values), with both price and volume declining, presenting a typical soft demand + profit-taking structure rather than a singular panic sell-off.
● Order Book Structure Changes: According to order depth and market records, the density of buy orders from the first to the third levels has noticeably thinned compared to the peak period, while sell orders have shown a stepped accumulation above key resistance levels. The Brief mentions that on some major exchanges, multiple market sell orders worth hundreds of thousands of dollars appeared in a short time, directly impacting the order book and amplifying short-term slippage.
● Increased Proportion of Active Selling: Comprehensive statistics from on-chain and market data indicate that the behavior of actively hitting buy orders with market sell orders has significantly increased recently, with the proportion of active selling transactions rising from about 45%–50% to over 60%, indicating a shift in dominance from bullish FOMO to a net selling structure led by bears and profit-takers.
● Funding Leverage Contraction: Open interest (OI) in perpetual contracts has simultaneously reduced during the price correction period. The Brief points out that leveraged long funds have chosen to reduce positions and lower leverage rather than continue to average down, coupled with funding rates falling from high positive levels to near neutral or even temporarily negative values, reflecting a clear downgrade in bullish confidence.

Who is Selling: On-Chain Whales and Structural Selling Pressure Breakdown

● Fund Movements:

● Early Whales Taking Profits: The Brief sampled multiple early entry addresses, some of which have gradually reduced their holdings in the high price range of PENDLE (mid to late December in the Eastern Standard Time zone), with individual address reductions mostly in the range of hundreds of thousands to over a million PENDLE. Although there is no single "super seller" causing a crash, the concentrated profit-taking by bulls has formed a persistent structural selling pressure.
● CEX Recharge Surge: On-chain transfer data indicates that PENDLE recharges to centralized exchanges have significantly increased within days after the price peaked, maintaining at 2–3 times the previous average for several days. The peak in recharges coincides closely with the weakening price, pointing to a typical "on-chain reduction - sell within the exchange" path.
● LP and Farmer-Type Addresses Reducing Positions: Among participants in yield protocols, a group of addresses that have long accumulated PENDLE through liquidity mining and yield strategies have gradually reduced their positions after a significant price increase. The Brief shows that these addresses are not liquidating all at once but are employing a high-level segmented selling strategy, distributing selling pressure over multiple trading days, thus extending the decline period.
● Short-Term Funds Engaging in Reverse Betting: During the consolidation phase at PENDLE's highs, the perpetual contract market has already seen bears tentatively building positions. As on-chain selling pressure increases, contract shorts have gradually increased their positions, forming a dual pressure of "on-chain selling + derivative shorting," creating a clear ceiling effect on short-term prices.
● Whale Behavior More Defensive than Fleeing: The Brief notes that a few large addresses have transferred some assets from exchanges back to on-chain cold wallets, with no large-scale liquidation or protocol abandonment migration occurring across the network. This indicates that the dominant selling pressure is more likely from mid-to-large holders taking profits + short-term speculative funds, rather than a systematic exit by core related whales of the project.

Governance and Community Sentiment: From High Participation to Tepid Voting

● Sentiment and Participation:

● Governance Activity Heat Cooling: During the last peak phase of PENDLE's market, the voting rates and discussion heat of several governance proposals surged simultaneously, with the number of participating addresses for some key proposals reaching a new high for the phase. The Brief shows that in the recent round of governance proposals, the number of participating addresses and total voting weight have both declined, falling about 30%–40% from the previous peak.
● Voting Preferences Becoming More Conservative: From the proposal approval situation, it can be seen that community support for "more aggressive incentives, leverage, or new experimental mechanisms" has decreased, with conservative or cautious factions increasing their voting weight. This change in preference is highly synchronized with the price correction cycle, reflecting a typical increased risk aversion characteristic.
● Discussion Topics Shifting from Expansion to Risk Control: The Brief indicates that community discussion keywords have gradually shifted from "expansion, innovation, cooperation" to "sustainability, risk, caution," with the focus in forums and social media beginning to center on sustainability of yields, protocol security boundaries, and token release rhythms, reflecting an overall sentiment shift from excitement to reflection.
● Emotional Divergence Between Core Contributors and Ordinary Holders: Core builders are still advancing functional upgrades and ecological cooperation, while short-term holders and external speculative funds are more pessimistic during the price correction. The participation of long-term holding addresses in governance voting remains relatively stable, but the voting enthusiasm of newly entered short-term addresses has significantly cooled, amplifying the sense of emotional disconnection.
● On-Chain Activity and Price Linkage Weakening: During the uptrend, price increases are often accompanied by simultaneous increases in governance participation and discussion volume; however, in this round of correction, the price decline has not seen an equally strong "rights protection" governance mobilization, indicating that some funds have chosen to exit directly rather than change the protocol path through governance.

Deep Logic: Fundamentals Unchanged, Expectations Returning from "Overly Optimistic" to Neutral

This price correction of PENDLE is not an isolated event but resonates with the macro rhythm of the entire yield sector returning from high expectations to reality. During the previous phase of soaring yields and high-frequency narrative exposure, the market gave an extremely optimistic pricing for the growth rate of yield splitting and yield derivatives, driving the token to experience excessive revaluation in a short period. As mainstream LST yields have fallen and arbitrage space has been gradually compressed, the protocol finds it difficult to sustain a high growth curve in the short term, leading most speculative funds to choose to lock in paper profits and withdraw from high Beta targets, forming persistent on-chain and market selling pressure. Meanwhile, the cooling of sentiment at the governance level also reflects the community's re-examination of the model of "aggressive expansion for high-speed growth": after experiencing a round of market validation, participants are beginning to focus more on incentive efficiency, protocol security, and the sustainability of income structures. The price correction and decline in order heat appear more like a necessary correction after the previous excessive expansion, pulling market expectations back from "linear high growth" to a more realistic neutral range, rather than fundamentally denying the protocol's direction.

Bull-Bear Game: Disagreement Concentrated on "Is the Adjustment in Place?"

● Optimistic/Supporters: Believe this is a phase benefit, providing a healthier position structure and a reallocation window.

● Bullish Viewpoint One: Valuation Returning from Overheated to Reasonable Range: Bulls believe that PENDLE's core mechanism and protocol income path have not undergone negative changes, and the current correction is mainly a technical adjustment to the previous accelerated upward movement and leverage amplification. The decline in price and order heat helps to squeeze out short-term FOMO bubbles, providing more attractive entry points for long-term participants.
● Bullish Viewpoint Two: Selling Pressure Structure More Dispersed and Absorbable: The Brief shows that this round of selling pressure is more inclined towards multiple entities reducing positions in batches rather than a concentrated sell-off. Supporters believe this structure is conducive to the market gradually digesting sell orders over a longer period, rather than a one-day crash, helping to maintain the medium to long-term credit of the protocol and token.
● Bullish Viewpoint Three: Rationalization of Governance Sentiment is a Long-Term Benefit: The shift from "aggressive expansion" sentiment to "risk control and sustainability" represents a more mature development stage for the protocol in the eyes of bulls. The relative weight of long-term holders in governance is expected to reduce the interference of short-term emotional fluctuations on core protocol decisions.

● Pessimistic/Opponents: Worry that the correction will evolve into a trend bear market, with emotional corrections upgrading to valuation collapses.

● Bearish Viewpoint One: Dual Decline in Orders and Governance Heat is a Top Signal: The bearish camp emphasizes that the timing of price corrections, shrinking transactions, increased recharges, and declining governance participation highly coincides, likely indicating that the medium to long-term top of the previous major upward wave has appeared. Without new narratives and funding drivers, this round of adjustment may not be a short-term washout but rather a longer cycle of valuation return.
● Bearish Viewpoint Two: The Yield Sector Overall Faces a "Structural Ceiling": Pessimists believe that as mainstream on-chain yields stabilize and arbitrage space is rapidly compressed by large amounts of capital, the yield derivatives sector where PENDLE resides will find it difficult to maintain its previous high-speed expansion, putting pressure on protocol income and token value, limiting the rebound height.
● Bearish Viewpoint Three: Recovery After Emotional Breakage Requires More Time: Short-term funds injured during the high-level correction often choose to exit at highs rather than increase positions during subsequent rebounds, forming a rebound as selling pressure structural upper resistance. Bears believe this psychological trauma effect will prolong PENDLE's recovery cycle from emotional highs back to rationality.

Outlook: Variables in Funds and Narratives, Key in Rebuilding Growth Curve

In the short term, the market will focus on several key variables: first, whether on-chain and CEX selling pressure gradually diminishes, including recharge scale retreat, decreased active selling proportion, and contract funding rates returning to neutral; second, whether the protocol itself can present a new growth curve, such as promoting new sources of income, expanding asset types, or optimizing existing yield splitting structures, thus providing more solid cash flow support for token value; third, whether governance and community can move from emotional corrections to constructive adjustments, providing more attractive incentive schemes for long-term users and liquidity without sacrificing safety and sustainability. If at least one or two of these variables show positive turning points, the current correction is more likely to be defined by the market as a "healthy adjustment"; otherwise, PENDLE is likely to maintain a weak balance state of existing fund games and incremental fund watchfulness for a longer period, with price performance and order heat struggling to return to the previous frenzy stage.

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