PENGU price breaks out of falling wedge, can it reclaim $0.045?

PENGU price rallied over 18% in the past week after confirming a breakout from a falling wedge pattern. Based on this setup, the token may continue to extend its weekly rally.

Summary

• PENGU price has rebounded today following weeks of a downtrend.
• Trading volume for PENGU has risen sharply in the past 24 hours.
• The token has been forming a cup and handle on the daily chart.

According to data from crypto.news, Pudgy Penguins (PENGU) was trading at $0.035, up 11.6% over the past 24 hours and 19% over the past week. On a broader scale, the token’s price remains 22% under its July high of $0.045 this year.

PENGU price rallied today alongside a threefold surge in daily trading volume to $951 million, while its market cap climbed past $2.2 billion, overtaking major players like Kaspa (KAS) and Cosmos Hub (ATOM).

PENGU price confirms a falling wedge

On the daily chart, PENGU has confirmed a breakout from a falling wedge pattern, where it had been consolidating for the past seven weeks. This bullish continuation pattern is defined by converging downward-sloping trendlines and typically precedes a sharp upside move once broken.

On a broader timeframe, the falling wedge also forms the handle of a larger cup and handle pattern that has been developing since the start of this year. 

A cup and handle structure is typically characterized by a rounded bottom (the cup) followed by a short-term downward drift (the handle). When an asset’s price breaks out of this pattern, it is typically followed by an upside rally.

Technical indicators reinforce the bullish outlook. The MACD lines have recently experienced a positive crossover, with growing green histograms, a buy signal. Additionally, the Relative Strength Index, which measures the speed and magnitude of recent price changes, is now above 59, another factor that points to growing pressure from buyers.

Based on this setup, PENGU now targets a move toward $0.045, its July high, and a projected level based on the falling wedge breakout. 

Meanwhile, a successful breakout above the cup and handle neckline at $0.047 would confirm the larger pattern and open the way for further gains. 

However, a drop below the $0.027 support level would invalidate the setup.

Bullish catalysts aligning for PENGU rally

Pudgy Penguins have a few bullish factors lined up that could drive the aforementioned gains over the coming weeks.

One major catalyst has been renewed community interest, especially as the U.S. SEC is set to give its decision on the first PENGU ETF, dubbed the Canary Spot PENGU ETF, by Oct. 12. 

Although the ETF has been delayed previously, traders appear to interpret the ETF, designed to bundle PENGU tokens with NFTs, as a step toward broader institutional acceptance of meme assets.

Additionally, on-chain data reveals ongoing accumulation, while engagement metrics suggest significant room for growth. 

In a recent official X post Pudgy Penguins team highlighted that although there are over 800,000 holders, only 5,700 have joined the “PENGU Platoon,” the project’s core community on X. This points to a large base of passive holders that could become active participants.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.