- PENGU gained by 9.6% in 24 hours, backed by a long/short ratio of 54.01% favoring bulls
- If spot selling continues, PENGU may struggle to maintain momentum despite bullish leverage
In the last 24 hours, Pudgy Penguins [PENGU] recorded a decent price rally, gaining by 9.6% within this period.
Analysis also indicated that buying activity in the derivatives market has been high – A sign that these traders may be anticipating the memecoin’s rally. And yet, spot traders continue to offload the asset, expecting a downtrend.
What are derivatives traders up to?
At the time of writing, derivative traders appeared to be increasingly confident. In fact, the buying volume of traders in the derivatives market has been the highest across multiple timeframes.
In the last four hours, the Long/Short Ratio stood at 52.67% in longs versus 47.33% in shorts.
This skew echoed across higher timeframes, reflecting sustained buying pressure in the derivatives market.
Source: CoinGlass
Zooming out, the 24-hour Long/Short ratio also revealed a buyer-heavy bias – 54.01% long versus 45.99% short – reinforcing expectations of an extended rally.
On top of that, the Open Interest-weighted Funding Rate flipped positive, adding fuel to the bullish thesis.
In case of it being positive, it means that a majority of open positions in the market are long trades, with the same anticipating a price rally.
Source: CoinGlass
Historically, a positive Funding Rate has aligned with rising price action, while negative readings tend to accompany corrections.
Naturally, the press time setup suggested that leveraged sentiment might favor further gains. For now.
Spot sellers could delay a potential price move
Now, while derivative traders are betting on a potential price rally for PENGU, spot traders are doing the opposite.
In the last 24 hours alone, over $808,000 worth of PENGU was offloaded by spot holders. This cohort of investors sold $808,000 worth of the asset within this period.
Source: CoinGlass
The scale of the offloading suggested that traders are likely taking profits, and market readings could shift soon.
However, extended selling pressure would imply that these traders aren’t just taking profits – They’re reducing their exposure to PENGU. This could force the asset’s price to trend lower from its current level.
Which path will PENGU take?
Finally, AMBCrypto’s analysis used liquidity clusters in the market to predict the potential direction PENGU might take.
At the time of writing, there were more liquidity clusters above the price at $0.015. Here, it’s worth noting that liquidity clusters tend to act as a magnet, attracting price movement toward them.
Source: CoinGlass
If this setup holds, PENGU will have a good chance of rallying higher, aligning with the sentiment in the derivatives market.
