Recent price movements of Pudgy Penguins (PENGU) have sparked discussions among analysts and traders. The cryptocurrency, which recently showed impressive growth, experienced a sharp decline, raising questions about the reasons behind these changes.
Sharp Price Fluctuations of PENGU
Last week, PENGU held the second position among cryptocurrencies, demonstrating stable growth. However, within a day, the cryptocurrency plummeted. According to cryptocurrency expert Gerhard, such changes are often not driven by fundamentals, but rather by leveraged trading. He noted that sharp price movements are usually caused by large bets on the futures market, where the price can pump quickly when long positions increase but can fall just as quickly as momentum wanes.
Trading Activity on Centralized Exchanges
Despite decent liquidity on the Solana blockchain, most trading activity for PENGU is observed on centralized exchanges such as Binance, OKX, and MEXC. Gerhard emphasized that Binance alone saw a futures trading volume of $77 million in 24 hours, indicating high risks and short-term bets lacking long-term growth. While PENGU has garnered a lot of attention, the number of token holders has barely changed, suggesting a lack of retail interest.
Analysis of Insider Activity and Transaction Tracking
In one of the more intriguing aspects of the analysis, Gerhard and his team are monitoring around 600 influencer wallets. By analyzing NFT activity, deposit addresses, and token patterns, they identify who is buying what before a token becomes popular. Gerhard pointed out that insiders often get in early, create hype in social media, and watch as their followers drive up the price. This creates a risk of pump-and-dump schemes.
Thus, the current wave of interest in Pudgy Penguins may stem from short-term bets rather than long-term investments. Such dynamics raise concerns about price stability and growth potential in the future.
