Pudgy Penguins (PENGU) Holders Offload as Price Climbs, Casting Doubt on the Sustainability of Its Recent Gains

Pudgy Penguins (PENGU) has become the market's top gainer, rising 6% in the past 24 hours. At the time of writing, the meme coin is trading at $0.025.

Meme coin Pudgy Penguins (PENGU) has emerged as the market's top gainer, notching a 6% increase in the past 24 hours. At the time of writing, the token is trading at $0.025.

The price surge has triggered a wave of selloffs, evidenced by a net outflow of $1.14 million from PENGU's spot market on Thursday, according to data from Coinglass. This indicates that holders are cashing out their profits as the token's price rises rapidly.

When an asset experiences spot outflows during a price rally, it suggests that investors are selling their holdings despite the rising value. This is typically indicative of profit-taking and a lack of long-term confidence in the price surge.

Moreover, PENGU's Chaikin Money Flow (CMF) is below zero at -0.19 on the daily chart, forming a bearish divergence with the token's rising price. This indicates a weakening buying pressure as the price continues to rise.

The CMF measures the cumulative flow of money into or out of an asset over a specified period, indicating buying or selling pressure. When the CMF is negative while an asset's price is rallying, it suggests that the rally is occurring without strong buying interest. This signals a weakness in the price movement and a higher risk of a reversal.

PENGU trades at $0.025 at press time, hovering slightly above the support formed at its all-time low of $0.022. If buying activity fails to materialize, the token's price could drop toward this level in the near term.

However, strong demand for the altcoin could invalidate this bearish scenario, potentially pushing PENGU's value up to $0.030.