Key Takeaways
Pengu is breaking out of a bullish pennant flag but faces heavy seller dominance. Besides, declining Open Interest and long liquidations suggest consolidation will continue before a true breakout.
Pudgy Penguins [PENGU] was trading at $0.03416 after slipping 3.13% in the past 24 hours, at press time. Its 24-hour trading volume had plunged more than 54% to $460 million.
The market cap stood at $2.14 billion, reflecting broader caution despite ongoing recovery attempts.
However, charts indicated that PENGU is breaking out of a bullish pennant flag, a continuation pattern that often precedes upside rallies.
Can PENGU turn its bullish pennant into sustained growth?
PENGU is breaking out of a bullish pennant flag, a pattern that typically emerges after an impulsive move and suggests continuation.
The formation signals renewed interest from buyers, with projections pointing toward a possible rally to the $0.09 region.
However, the breakout comes after weeks of consolidation, meaning stronger follow-through buying remains necessary to confirm the setup.
Hence, PENGU’s current positioning marks a decisive turning point where bulls must maintain pressure. If they succeed, the structure could act as the foundation for a larger upward trend.
Source: TradingView
Why do sellers still dominate the Futures market?
Despite the bullish technical breakout, the Futures Taker CVD over the past 90 days shows that sellers remain firmly in control.
Taker sell orders continue to dominate over buys, indicating that many traders are still betting against a sustained rally.
This reflects ongoing skepticism surrounding PENGU’s breakout, even as spot market activity hints at recovery. However, if the price pushes higher despite this pressure, short positions could be squeezed.
Therefore, Futures data highlights both a risk and a potential catalyst, depending on how traders respond.
Open Interest drop signals fading conviction
At press time, Open Interest (OI) declined by more than 7%, slipping to $367 million, highlighting a retreat in leveraged positioning. This suggests traders are scaling back exposure rather than doubling down on bullish bets.
Such a decline often reflects cautious market sentiment, especially after volatile moves. However, falling OI can also reset conditions by flushing out weaker hands, leaving room for more sustainable growth.
Hence, while the drop signals reduced confidence, it may also clear the path for a healthier rebound if buying resumes.
Liquidations weigh heavier on long positions
Recent liquidation data reveals that long positions have been hit harder than shorts, signaling that aggressive buyers are getting shaken out.
At the time of writing, PENGU saw $164,000 in long liquidations compared to just $42,000 in shorts. This imbalance underscores how volatility has favored bears in recent sessions, despite the bullish setup.
However, frequent long squeezes can create conditions for sharp rebounds once selling pressure eases. Therefore, liquidation trends confirm current risks but also highlight potential fuel for future upside.
Will PENGU extend or consolidate?
PENGU’s breakout from a bullish pennant flag signals strong technical potential, but optimism is tempered by futures market pressure, including seller dominance, declining OI, and a wave of long liquidations.
Additionally, liquidity clusters between $0.033 and $0.035 suggest that short-term volatility and choppy price action are likely to continue.
Given these conditions, the evidence points to ongoing consolidation within the flag pattern before PENGU can build enough momentum for a decisive breakout toward the $0.09 target.
