Pudgy Penguins (PENGU) Price Nears Overheated Territory After 32% Rally

Key Takeaways

• PENGU jumped 32% in 24 hours, breaking out of a descending triangle to hit $0.0068 — its highest level since March 28.
• The rally stalled near a historical supply zone, with $0.0070 acting as a resistance that has previously triggered corrections.
• Weighted Sentiment spiked to 1.05, suggesting overly bullish sentiment that could signal a local top and incoming retracement.

After months of downtrend and repeated rejection at key resistance levels, Pudgy Penguins’ (PENGU) price has finally broken free.

On Tuesday, April 23, PENGU printed a bullish engulfing candle on the daily chart. The breakout triggered a sharp rally, pushing the token’s price up by 32% within 24 hours, taking it to $0.0068, a level not seen since March 28.

While PENGU’s price has triggered bullish sentiment among its holders, indicators suggest the rally may be short-lived. Here is why.

PENGU Faces Big Obstacle Despite Surge

PENGU’s price fell to $0.0039 on April 9 after being stuck in a descending triangle. But today, the cryptocurrency’s value is out of that bearish pattern following notable buying pressure.

However, PENGU’s surge to $0.0068 has left it in a tricky situation as it has hit a historical supply zone. As seen below, it becomes challenging to trade higher when the token hits this level.

For instance, on March 17, PENGU bulls attempted to push the price above $0.0070, but failed. A similar thing occurred on March 28, as this rejection led to a double-digit correction.

As of this writing, the Pudgy Penguins token seems to have experienced a pushback as it attempted to rally above $0.0070. In addition, the Relative Strength Index (RSI) reading has increased to 65.39, indicating bullish momentum.

However, it is close to the overbought level amid a drop in the Chaikin Money Flow (CMF) reading. In the image above, the CMF reading has dropped below the zero signal line, indicating that buying pressure is fading.

Should the rating continue to slide, then PENGU’s price might find it challenging to retest $0.0070.

Sentiment Spikes, Hints at Local Top

Away from the technical outlook, Santiment data shows that the Weighted Sentiment around the cryptocurrency has spiked to 1.05. Weighted Sentiment shows whether the overall conversation around a coin is positive, negative, or neutral.

The market is excited when the sentiment is positive, indicating a bullish outlook.  A negative reading, on the other hand, indicates fear and is mostly bearish.

However, when either ratings are extreme, it signifies a local top or bottom. For PENGU, the current reading seems extreme. As such, the price is likely to pull back after this upswing.

PENGU Price Analysis: Setback Possible

Regarding the short-term outlook, the daily chart shows that PENGU’s price has yet to breach a major resistance despite the rally. One indicator that reveals this is the Ichimoku Cloud.

Typically, when the cloud is below the price, it indicates support, and the price is likely to climb. However, the Ichimoku Cloud is above PENGU’s current market value in this case, signaling a notable resistance between $0.0070 and $0.0076.

If this position remains the same, the token could lose some of its recent gains. If validated, PENGU’s next move could be a drop to $0.0056 near the 0.236 pullback region.

However, if bulls return in full force, this prediction might not pass. If that were to happen, the cryptocurrency’s value could extend its rally toward $0.0086.