Does the recent bounce back pave the way for PENGU to reverse its trend?

The Pudgy Penguins Token (PENGU) has surged 5% in the last 24 hours, reflecting a clear improvement in short term market sentiment, as Bitcoin (BTC) climbed 3.3% to 115,000 USD and Ethereum (ETH) also recorded a 7% increase during the same period.

Source: NFT Price FloorIn the past month, the trading volume of Pudgy Penguins NFTs has seen a strong surge. Notably, trading activity became more vibrant after the liquidation on October 10, when the floor price of the collection plummeted from 10 ETH to only 7.21 ETH.

For the PENGU token, the downtrend has remained dominant since mid-August after losing the support level of 0.032 USD. However, considering the strong surge in June to 0.046 USD, the overall oscillation structure of PENGU still maintains an upward trend, indicating that the bulls have not completely lost control.

Negative sentiment and sustained selling pressure hinder the bulls

Source: SantimentThe weighted sentiment indicator (overall sentiment) has continuously been in the negative zone since the end of July, reflecting weak engagement on social media. Positive mentions of PENGU appear sporadically, not enough to reverse the overall declining trend.

At the same time, the open contract (OI) has sharply declined since the beginning of August, indicating the cautious sentiment of derivative investors and reinforcing the prevailing pessimistic outlook in the market.

Source: GlassnodeSelling pressure has significantly increased over the past month. The 0.03 USD mark – which was a strong support zone in August and September – has been breached in October, thus turning into a resistance zone. At the same time, the Coin Days Destroyed index has continuously recorded new highs, indicating that strong selling activity is occurring on-chain.

Source: TradingViewThe Fibonacci retracement levels indicate that the upward oscillation structure of PENGU is still present; however, the series of lower highs and lows since August continues to affirm the short term downtrend of this token.

However, the Chaikin Money Flow (CMF) has not yet recorded signs of strong and prolonged selling pressure, opening a small ray of hope for the bulls regarding the possibility of a reversal.

To regain momentum, PENGU needs to break through the important resistance zone at 0.027 USD – a price level that could play a role in reactivating the technical structure in a bullish direction.

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