After hitting a low point earlier this week, the Pengu (PENGU) cryptocurrency experienced a sharp rebound on January 23rd, driven by community excitement surrounding the imminent launch of the Abstract mainnet and related speculation.
The Pudgy Penguins token surged 8.7% to an intraday high of $0.0264, solidifying its position among the top 100 cryptocurrencies by market capitalization according to CoinGecko. With its market cap exceeding $1.6 billion, Pengu witnessed a significant 20% increase in daily trading volume, surpassing $411 million.
This rally occurred despite a broader downturn in the NFT token market, with notable projects like Floki and ApeCoin experiencing substantial losses.
Abstract Anticipation Fuels Pengu’s Rise
The primary catalyst for Pengu’s defiance of the market trend is the growing anticipation among holders regarding the launch of Abstract, an Ethereum layer-2 network developed by Igloo Inc., the parent company of both Pengu and the Pudgy Penguins NFT collection.
Rumors suggest that Pengu holders may be eligible for an airdrop of Abstract’s native token during its token generation event, although this has not been officially confirmed. Abstract has announced a January mainnet launch, leaving only a few days for the launch to materialize.
A few potential airdrops this month$PENGU holders to receive Abstract (potentially another 6 fig + airdrop. You may potentially qualify by getting the Pengu holder role and Pengu enjoyer roles in the Pudgy discord
— 🐧 Pentoshi (@Pentosh1) January 3, 2025
Phantom wallet airdrop (less certain on this one) but fingers…
This price surge indicates that investors are strategically positioning themselves ahead of the anticipated benefits from the upcoming network launch.
Other Contributing Factors
A notable increase in Pudgy Penguin NFT sales also likely contributed to Pengu’s rally. According to CryptoSlam data, Pudgy Penguin sales surged by nearly 80% on January 23rd, making it the sixth-best-performing NFT collection. Daily transactions also saw a 100% increase, reaching 16.
Technical Analysis Points to Potential Correction
While the current momentum is propelling Pengu upwards, technical indicators suggest a potential price correction may be imminent.
On the 1-day PENGU/USDT price chart, the meme coin’s price hovered near the lower Bollinger Band, indicating bearish control and the possibility of further losses if selling pressure intensifies.
The Relative Strength Index (RSI) at 41 signals bearish momentum, though not yet an oversold condition, suggesting potential downward pressure unless buying interest increases.
The Supertrend line remains above the asset’s price, while the negative Chaikin Money Flow reading indicates waning buying pressure.
Based on these indicators, Pengu may soon experience a pullback, potentially retracing to its local support at $0.022. A breach below this level could push it further towards the psychological support at $0.020.
One potential catalyst that could invalidate this bearish scenario is ongoing speculation regarding a potential end to capital gains taxes on cryptocurrency profits for U.S.-based investors.
Also Read: Whale Deposits $9.5M in PENGU Tokens: Is a Bullish Breakout Coming?
If such a policy were implemented, projects developed by U.S. companies like Igloo Inc. could experience significant upside.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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