- PENGU uptrend has been undefeated, despite the short-term volatility over the past four days
- A retest of the $0.012-$0.013 region could offer a buying opportunity
Pudgy Penguins [PENGU] was on a strong uptrend at press time, with its momentum firmly bullish too. The swift rally on 28 June was likely the byproduct of bullish enthusiasm following the ETF hype.
The official token of the Pudgy Penguins NFT collection seemed to be challenging the $0.015 resistance zone, which had rebuffed the price back in May.
Source: PENGU/USDT on TradingView
The market structure was bullish, and the local high at $0.0125 has also been broken. A fair value gap (white) was left behind, which should offer a good buying opportunity in case of a pullback. However, a pullback might not be imminent. The Awesome Oscillator continued to climb higher, and its move beyond the zero line showed buyers have been driving the momentum.
The volume indicators were also firmly bullish. The CMF was well above +0.05, and its whopping +0.21 reading indicated heavy capital inflows to PENGU. The A/D indicator also captured the heightened demand recently.
The high daily trading volume trend began last Friday and appeared to be still going strong. The high volume saw Pudgy Penguins’ token climb higher, but this hike was punctuated by greater volatility. This was evidenced by the long candle wicks both above and below the candle bodies on the price chart.
The volatility suggested that in the lower timeframes, PENGU’s price action may be dictated by liquidity clusters.
Clues from PENGU’s liquidation heatmap
Source: Coinglass
After a strong rally, like the one we saw towards the end of June, it is normal for assets to consolidate. PENGU has only kind of done this, because even though its momentum has slowed down, it has continued to form higher lows. Hence, a range formation was not in place.
On Tuesday, a sharp price bounce to the $0.162-level took out a cluster of liquidity at $0.0157. Immediately afterwards, the price dived to $0.0138, hunting the liquidity in the opposite direction. This was a sign that volatile conditions may be setting in, and traders should be extra cautious or remain sidelined.
The $0.012-$0.013 range is a magnetic zone that could yield a bullish move. It also appeared to be within the fair value gap highlighted earlier, and marked the previous local high. A retest of this level, followed by a move higher, may be a feasible scenario to watch out for in the coming days.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
