Pudgy Penguins [PENGU] has rallied by 137% in a fortnight, flipping its market structure decisively bullish in the process.

The early February resistance at $0.0135 was tested as resistance and at press time, the $0.0108 support level seemed to be holding PENGU up.

Pudgy Penguins (PENGU) has rallied by 137% in a fortnight, flipping its market structure decisively bullish in the process. The early February resistance at $0.0135 was tested and at press time, the $009 support level seemed to be holding PENGU up.

Bitcoin's (BTC) move higher by 15% over the past two weeks has given many altcoins room to breathe. Not all altcoins managed to outperform BTC so massively though, implying that relative strength was on Pudgy Penguins' side.

The Pudgy Penguins NFT floor price has also been trending higher, helping explain the demand for PENGU tokens. For example – IT was at 11.5 ETH at press time, up from 9.54 ETH on 17 April.

PENGU likely to see a deeper retracement

The 1-day chart revealed that the Pudgy Penguins token smashed past local resistance levels (orange) in the second half of April. The trading volume witnessed an uptick, legitimizing the rally.

After hitting a high of $0.0141, PENGU bulls were rebuffed. The Fibonacci retracement levels showed that the price could descend further. The 61.8% and 78.6% retracement levels at $0082 and $0066 appeared to be the key support levels that bulls must defend.

They would also offer a good buying opportunity upon a retest. The OBV has been trending higher over the past month, breaching the mid-March highs. It signified a hike in demand for PENGU. The RSI seemed to be falling from overbought territory as the price retraced too, indicating a reset period.

The evidence at hand showed that PENGU could see further downside, before resuming its rally. As a relatively small-cap coin, volatility is to be expected. If the token can see a bullish reaction at $0083, the bulls could target the $0.0142-$0.0151 region next.