Pudgy Penguins [PENGU] is down 14% in the past 24 hours. PENGU had the biggest loss among CoinMarketCap’s top 100 crypto tokens during this period.
A couple of factors influenced this sudden crash, which occurred after a week of positive gains across the crypto sector.
Monthly unlocks fuel selling pressure
The number of transactions was growing, but sellers dominated them more. According to Dune Analytics, sell transactions were 19,865, while those of buyers were 19,648. However, the difference was not that big.
Additionally, the number of daily sellers was 959, while the number of buyers was 804.
This sale came as a result of monthly unlocks of 712.4 million PENGU worth $6.25 million.
Of this amount, 279.3 million PENGU worth $2.45 million was meant for the company, while 433.1 million tokens valued at $3.80 million went to the current and future teams.
Network data from Arkham showed the teams distributed their tokens this week, valued at $3.40 million. Hence, this development potentially sparked sell pressure from on-chain traders.
Furthermore, capital was leaving the broader altcoin market, and trending tokens like PENGU were taking the hardest hit. An increase in daily trading volume by 17% to around $181 million affirmed the sell pressure.
Additionally, the decline in collections like Bored Apes spread into PENGU because it is intertwined with the NFT sector. The memecoin is highly sensitive to sentiment shifts away from digital collectibles.
Can PENGU bounce off the 0.618 Fib level?
PENGU broke a rising trendline support and dropped to the 0.618 Fibonacci Retracement level. At this level, the memecoin has recovered half of the 31% crash but is approaching the level for the second time.
Bulls are returning at this level even though capital flows are negative. The Chaikin Money Flow is -0.02, as well as a declining Directional Movement Index (DMI). The DMI lines are all pointing downwards.
As price forms a potential turning point at $0.008266, the second touch of the 0.618 Fib level could spark a rebound. This would need PENGU breaking above $0.009846 to confirm an uptrend continuation.
Otherwise, if sellers maintain their momentum, they might break the level down. As a result, the next targets would be at $0.007284 or lower.
Therefore, the crash may not last, especially if the market prices in the unlocked tokens of this month.
Final Summary
- PENGU loses 14% in the past 24 hours amid broader crypto market correction and massive monthly token unlock.
- Price approaches the 0.618 Fib level for the second time, which, if defended, could ignite a reversal.
