Smart investors in the market have halved their positions in PENGU, possibly due to weak fundamentals.
Spot and derivative traders have also followed suit. However, the possibility of a bullish rally remains very strong.
The upward momentum of Pudgy Penguins [PENGU] has continued to weaken after a 135% increase over the past month. In the last 24 hours, a price increase of 1.94% clearly reflects a lack of market confidence.
As analysts try to determine whether this rally can be sustained or if PENGU will continue to drop, TinTucBitcoin's analysis shows PENGU has dual volatility on the chart.
Smart investors reduce their holdings of PENGU.
Smart investors are known for their strategic trading, buying assets at low prices and selling at high prices.
Currently, these investors have sold 33% of their PENGU Tokens, indicating they are retreating with profits.
Deeper analysis shows that the decline began after a smart investor wallet, named 'Sigil Fund,' sold 52 million PENGU Tokens. This event occurred before the price of PENGU halved.
Source: Nansen
Moves like this often decrease investor confidence, as observed in many top wallets.
The spot market has shown this increasingly negative shift.
At the time of writing, the exchange netflow has turned positive for the first time since April 27.
This change indicates that sellers are moving their assets from personal wallets to exchanges, with approximately $318,000 PENGU having been sold so far.
When both smart investors and spot traders start selling at the same time, it often signals a major price drop is about to occur as market sentiment turns against the asset.
The funding rate confirms bearish sentiment.
The Funding Rate (FR)—a measure of the cost to hold futures contracts—confirms the bearish trend of the market.
In the last 24 hours, the total FR has turned negative, at -0.0038%.
Source: Coinglass
This means that short sellers are currently holding a large portion of open futures contracts and must pay fees to maintain their positions.
As long as these sellers continue to pay fees, this indicates that the market remains under their control and prices may continue to decline.
On the OKX exchange, selling volume remains dominant with an index of 0.93, while traders on Binance have a similar position with a ratio of 0.9613.
Bullish roadmap ahead
Despite the downward trend, PENGU's decline seems to be setting up for a major rally in the coming days, according to technical analysis.
The decline began after the price tested the resistance level of the bullish triangle pattern that PENGU is currently trading in.
This bullish triangle structure often creates opportunities for growth, with prices expected to rise at least to the peak of the pattern.
Source: TradingView
For PENGU's bullish rally to start, its price must drop to the support level of $0.010559, forming the bottom of the pattern.
If PENGU tests this area again, it could trigger a price increase of 42.44% from that level.
Currently, smart investors and spot traders seem to be coordinating sales to push prices lower. This strategy allows for accumulation at lower prices before a potential major rally.
Source: https://tintucbitcoin.com/gau-pengu-ban-33-nhung-ky-vong-tang-42-the-nao/
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