Pudgy Penguins (PENGU) Token Continues Recovery Amid Abstract Mainnet Launch Speculation
Following a recent dip earlier in the week, the Pudgy Penguins (PENGU) token has shown signs of recovery on Jan. 23, experiencing a notable rally driven by community excitement surrounding the upcoming Abstract mainnet launch and associated speculation.
On Jan. 23, PENGU saw a significant 8.7% increase, reaching an intraday high of $0.0264. This surge positioned the meme coin as one of the top-performing assets among the largest 100 cryptocurrencies by market capitalization, as reported by CoinGecko. With its market cap surpassing $1.6 billion, PENGU also witnessed a substantial 20% rise in daily trading volume, exceeding $411 million.
Despite a 3.8% decline in the broader NFT token market over the past day, PENGU managed to defy the trend. Other popular projects like Floki (FLOKI) and Apecoin (APR) experienced notable losses of 16.2% and 10.9% respectively over the week.
The primary catalyst behind PENGU’s upward momentum was the growing anticipation among holders for the launch of Abstract, an Ethereum layer-2 network developed by Igloo Inc., the parent company of both PENGU and the Pudgy Penguins NFT collection.
It is widely speculated that Pudgy Penguins will be integrated into Abstract, and there are rumors circulating that PENGU holders may receive an airdrop of the layer 2 network’s native token during its upcoming token generation event. While these rumors are yet to be officially confirmed, Abstract has announced a mainnet launch scheduled for January, albeit without a specific date, leaving investors eagerly awaiting further details as the month draws to a close.
The recent price surge of PENGU suggests that investors are positioning themselves strategically in anticipation of potential benefits from the impending network launch. Additionally, a surge in non-fungible token sales for Pudgy Penguins, with an almost 80% increase on Jan. 23, has further fueled market interest. According to CryptoSlam data, Pudgy Penguin daily transactions also saw a significant 100% spike to 16, making it the sixth best-performing NFT collection.
Technical Analysis of PENGU
While PENGU’s current momentum is driving prices higher, technical indicators suggest a potential correction may be looming on the horizon.
On the 1-day PENGU/USDT price chart, the meme coin’s price was nearing the lower Bollinger Band, indicating bearish control that could lead to further declines if selling pressure intensifies. With the Relative Strength Index at 41, signaling a bearish trend but not yet reaching oversold conditions, the market may experience additional downward pressure unless buying interest increases to counterbalance the trend.
Furthermore, the Supertrend line positioned above the asset’s price and a negative reading on the Chaikin Money Flow suggest diminishing buying pressure. Based on these indicators, PENGU could potentially face a pullback, possibly retracing to its local support level at $0.022. A breach below this level could push the price towards its psychological support at $0.020.
However, ongoing speculation suggesting that President Donald Trump may eliminate capital gains tax on crypto profits for U.S.-based cryptocurrencies could serve as a catalyst to invalidate the bearish scenario. Projects developed by U.S. companies like Igloo Inc. could witness significant upside if such regulatory changes come to fruition.