PENGU touched $0.005778 on a recent saturday and did not stay there. While the asset has shown some bounce and is now observed towards current price levels near $0.006723, there is a different case that can’t be ignored.
The technical damage done from the peak of May to now is significant. Price reached a peak of $0.011900 earlier in May, could not retest that ceiling and rolled over, breaking through $0.009908, falling to $0.007461, and reaching a low at $0.005778, the new price point from which this asset must maintain a position for preserving a possibility of a bounce. The drawdown of 40 percent in four weeks is the main thing that needs to be addressed.
What is the chart indicating right now?
The $0.007461 level is the level in that everyone should be focusing on. It served as previous support stretching back to mid-April, held through late May and was afterwards broken in the selloff from the start of this month. The respective level has since flipped to overhead resistance. Price of this asset is trading at $.006723 and this is about 10.7 percent away from reclaiming it convincingly. A 4-hour candle closing above this level on increased volume could possibly mark a successful recovery. A grind up into it from below (no volume, just touching and pulling back) states the other side of the case: that the sellers are still in control, keeping the distribution zone intact for now.
That $0.009908 level above is what triggered the reversal from support to resistance when the failed late May recovery was roughly where $0.009500 failed. PENGU could not even recover its old support level on the rally attempt and that gives market participants a clue about the current recovery. Typically when an asset is not able to recover back to its old support, that leg down rarely happens once that creates a deviation setup if the previous lower high is flipped back.
$0.005778 is the only price that the bulls have down below and that was the low of the June 6 spike. In the case that it comes to retesting that level and is unable to hold it, then it doesn’t seem to have another relevant reference point until it reaches the zone of $0.004000-$0.004500, as there is no structural support between that and the chart looks clear as air as there are no significant levels in between.
The NFT sale that supported the bounce
On June 9th, a 1/1 left-facing Pudgy Penguin #6873 was sold for ~146.45 ETH that makes up to $250,000 and is widely thought of as one of the grails of the ecosystem. This time it is different; instead of another anonymous wallet flip, this purchase was made by Adam Weitsman from Now Media, and named purchases like this are signals that are quite different from inter-wallet flips. The market is still struggling to comprehend the brand’s valuation, something that is currently difficult for much of the market.
It is important to note that if someone pays $250K for a Pudgy ecosystem NFT, it does not guarantee that the price of that relative asset, which is PENGU goes up; NFTs and tokens are not the same asset. A single $250K sale may help to improve the market confidence, but buzz and buying pressure on $PENGU are distinct concepts.
What it means for the market participants
Price is currently trading down 10.7 percent against the $0.007461 that needs attention. A clear close above in HTF, supported by real volume, can open the way towards the higher levels of $0.009908. A rejection there prompts the market sellers to defend the same zone that they held since the June flip, and the recovery scenario may fail.
Below the level of $0.005778 is the only base that the bulls can take control of for now. It held the June 6 spike but if the asset loses it, then there is nothing visible until $0.004000. As long as $0.007461 flips and creates support out of it, it can’t be termed as a reversal and is more of just a bounce in the downtrend.
