Pudgy Penguins Rallies as NFT Sales Jump – Time to Buy PENGU?

Pudgy Penguins (PENGU) is making a strong comeback this month as the token has produced gains of 133.3% in the past week as sales of its popular non-fungible tokens (NFTs) skyrocketed.

Data from Open Sea shows that 202 Pudgy Penguins were sold in the past 7 days, representing a 221% climb. Meanwhile, the floor price of these NFTs rose by 18% while trading volumes nearly tripled during this same period.

Pudgy Penguins NFT Sales Data – Source: OpenSea

PENGU is a Solana-based meme coin that will eventually power an under-construction ecosystem that the creators of this popular NFT collection have promised to launch at some point.

The sale of NFTs does not directly impact the demand for PENGU but it may prompt investors to believe that the latter will be, somehow, positively impacted if the demand for the former increases.

PENGU Encounters Selling Pressure at $0.12

Pudgy Penguins (PENGU) has gone up by 6.2% in the past 24 hours despite the crypto market’s overall weakness today and currently sits at $0.01180 per token.

Trading volumes have skyrocketed by 78% during this period and currently sit at $565 million, accounting for nearly 80% of the token’s circulating supply in USD.

Although other top meme coins like Fartcoin (FARTCOIN) and Brett (BRETT) have more than doubled their price as well, PENGU is the one with the most loyal fan base of the three.

Solana-based meme coins have experienced a good deal of upside lately as a group, possibly as Fartcoin ignited what could be the beginning of a bullish cycle for the category.

Weekly DEX trading volumes in the Solana blockchain have surged from a yearly low of $7.92 billion to $20 billion as of last week as Raydium, Orca, and the recently launched PumpSwap have benefited from the category’s positive performance lately.

PENGU/USDT Daily Chart (Binance) – Source: TradingView

The daily chart shows that PENGU started to retreat today as it hit a huge order block at around $0.12 per token.

The price has distanced itself significantly from its point of control (POC) – the area where the most volumes have been traded – and could be poised to experience a strong pullback as momentum indicators have reached extreme levels.

The Relative Strength Index (RSI) has already entered overbought levels while the MACD’s histogram has been on an uptrend for 10 days in a row.

These are typically signs that the rally could be reaching its phase of exhaustion so traders should be cautious at this point to take some profits off the table as the market tends to sell off heavily stretched assets faster than it pumps it.

These Are The Key Supports to Watch

The outlook for PENGU is still bullish as the price broke above the 21-day EMA for the first time in months with strong volumes just a few days ago.

At this point, any light green bars in the MACD’s histogram may be considered a buying opportunity as the rally could keep going for a while.

That said, it would be nice to see the volume profile shifts to the point that the POC is closer to where the price is now as these low trading volumes open up the door for radical price swings in any direction.

If the price pulls back at this point, the 61.8% Fibonacci retracement level would be one of the key support areas to watch at around $0.0077, followed by the 21-day EMA, which currently sits at around $0.0072.