What To Know
- PENGU undergoes healthy correction, raising hopes of a $0.10 breakout.
- Analyst Ali Martinez predicts a strong rebound, echoing PENGU’s past Q2 rally.
- RSI rises amid a bullish wedge, but CMF signals weak capital inflows.
The meme coin market has remained somewhat stagnant over the past few weeks, which can be attributed to the prevailing market condition. Despite their popularity, most meme coins couldn’t step up their games and Pudgy Penguins (PENGU) was not an expectation.
This was the case as the token witnessed a double digit price crash last month. To be precise, PENGU’s value declined by more than 12% in the last 30 days, making it trade at $0.02915 with a market capitalization of over $1.8 billion at press time.
However, there is a catch in this story. PENGU might have a trick up its sleeves, which can turn the tables around in the meme coin’s favor soon! Ergo, let’s take a closer look at what’s going on with the meme coin.
Analysts Bet Big on PENGU
PENGU has been struggling to manifest upward momentum, and lately, its price action has indeed shown signs of fatigue. However, the well-known and widely followed crypto analyst Ali Martinez offered a fresh and encouraging update on his X account.
According to Martinez, the meme coin seems to be undergoing a healthy price correction as opposed to a sign of weakness. Corrections are typically opportunities in the crypto markets where assets consolidate before their next leg up, and this seems to be playing out for PENGU.
Martinez pointed out that a similar scenario had played out during the second quarter of the year. Back then, PENGU experienced a temporary dip, only to recover swiftly and rally toward the $0.047 mark.
This rebound instilled confidence in investors and showcased the meme coin’s resilience. If this trend repeats itself, as many traders are anticipating, the token could experience another strong breakout. In fact, Martinez predicts that this correction could set the stage for a significant price surge, potentially driving PENGU as high as $0.10. Such a move would mark a notable milestone for the Pudgy Penguins ecosystem and could reignite broader market interest in the project.
A Bullish Pattern Emerges
Since Martinez’s prediction looked ambitious, CryptoMoonPress dug deeper to find out the odds of PENGU actually kicking off a bull rally in the coming days. As per our analysis, a bullish pattern emerged on the meme coin’s daily price chart. A bullish falling wedge pattern started to form in late July, and since then, PENGU’s price has been comfortably consolidating inside it.
This development came as a great event for investors, given the breakout from an observed pattern increased the chances for Ali Martinez’s bullish call to be realized. Although the token has undergone a short-term price decline, technical indicators showed a confusing stance: For example, the Relative Strength Index (RSI) slightly increased, indicating that buying power is slowly coming into play.
When the RSI increases, it usually shows growing investor confidence and is indeed often counted on as an early sign of price recovery or upward movement. On the contrary, not every sign was friendly with this analysis.
The Chaikin Money Flow (CMF), another key indicator used to track capital inflows and outflows, recorded a drop. A declining CMF highlights that more money is leaving the asset than entering it, pointing toward weakening capital support. This divergence between RSI and CMF implies that while buying pressure is improving, the lack of strong liquidity inflows may prevent PENGU from achieving a sustained rally in the immediate term.
