Behind the price correction: whale sell-offs and liquidity contraction
Pudgy Penguins (PENGU) has seen a continuous price decline recently, retreating from a high of 0.048 USD, with a drop of over 11% on the leaderboard. This wave of correction stems from multiple factors:
• Internal wallet sell-off: Since mid-July, wallets associated with internal personnel have transferred over 66 million USD worth of PENGU to exchanges for arbitrage;
• Market sentiment impact: The tense atmosphere before the release of CPI data exacerbates sell-offs, coupled with the rise of Bitcoin's dominance, leading to a decrease in liquidity for most altcoins except ETH;
• Short sellers dominate: As of the time of writing, the long-short ratio is 0.94, with sellers accounting for 52%. The open interest has fallen from 607 million USD on July 24 to 464 million USD, and trading volume has shrunk from over 5 billion USD in mid-July to 1.07 billion USD.
CPI data releases positive signals, and price shows signs of rebound
The July CPI annual inflation data came in below expectations at 2.8%, bringing a reversal opportunity for PENGU. After the data was released, PENGU rebounded from the day's low of 0.0355 USD (opening price 0.037 USD) along the diagonal support line, in line with analyst Satoshi Flipper's previous predictions.
It is noteworthy that the financing rates of most exchanges have turned positive, suggesting that buyers are beginning to return. The market's panic sell-off has not been accompanied by a large trading volume, and the capital rotation is relatively controllable; the short-term decline may be a temporary adjustment.
Key going forward: The breakthrough of resistance levels determines the trend direction
Currently, the PENGU price fluctuates near the high point. Historical charts show that such patterns often indicate the continuation of a bullish trend. However, it is important to be cautious, as the current slow rebound pace indicates that sellers still have a certain level of control. Whether the resistance level can be broken will be a key test for a bullish reversal: if the breakthrough is successful, it is expected to end the adjustment; if it fails to break through, further consolidation or even a decline may be faced.
Overall, as macro sentiment eases and buyer capital returns, the short-term correction pressure on PENGU may gradually alleviate. Attention should be focused on the breakthrough of resistance levels.
