Pudgy Penguins (PENGU) kicks off 2026 with a bang, soaring +47% since January 1st. Currently trading at $0.0127, traders are closely watching a crucial support level. Is this breakout signaling the start of a massive bull run or just a trap for bulls? Analysis.
The crypto market is bouncing back after a challenging fourth quarter of 2025, and Pudgy Penguins is emerging as one of the leaders of this recovery. Currently trading at around $0.0125 (up nearly 9% over the last 24 hours), the token has broken out of a frustrating sideways consolidation that had persisted since mid-December.
This impulsive move is no accident. On-chain data reveals a violent short squeeze: approximately $265,000 worth of short positions have been liquidated, ten times more than long positions. This imbalance has acted as fuel for the price, forcing sellers to urgently buy back their positions.
Moreover, the OBV (On-Balance Volume) indicator shows an upward trajectory, exceeding $36 billion in cumulative volume. Additionally, the CVD displays a positive value for the first time since October 20. This confirms that this rally is supported by genuine capital inflow rather than mere empty speculation. Investors are accumulating, and buying pressure is real.
While euphoria is present, caution remains warranted. The $0.009746 level is crucial to maintain. This is the lowest point of the range that PENGU is attempting to break through.
For this breakout to be technically validated, bulls must absolutely defend this level in case of a retracement. As long as the price stays above this zone, the market structure remains decisively bullish. The momentum indicator, which has flipped from negative to positive, currently supports this upward dynamic.
However, a move back below $0.0096 would invalidate the recovery scenario and could signal a classic fakeout, trapping late buyers. The distribution of sales shows a slowdown in selling pressure (decline in massive sell orders), which leaves the field open for buyers to test new resistance levels.
The market seems to want to push higher. With the current price flirting with $0.013, the next psychological and technical resistance sits around $0.015, before considering a return to all-time highs.
If volume continues to flow in and the overall crypto market sentiment remains positive in this early 2026 period, PENGU could well be one of Q1’s best performers. But be warned: if Bitcoin shows signs of weakness, altcoins like PENGU will be the first to correct violently.
With indicators turning green and whales seemingly accumulating, the question arises for traders: Is this the time to ride the PENGU wave or should we wait for a retest of the key support to enter safely?
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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