Pudgy Penguins (PENGU) has seen a sharp correction after recording strong gains in recent weeks. At the end of June, PENGU began a rapid climb, gaining over 46% in just 14 days and reaching a peak above $0.017. The surge followed news that Canary Capital filed for a PENGU ETF. The filing sparked fresh enthusiasm among traders and drove strong buying momentum.
The rally also aligned with broader positive trends across crypto markets. Sentiment improved after the announcement of the first US Solana ETF approval, along with a new multi-coin ETF, and news of a ceasefire in the Middle East. These factors combined to create favourable market conditions that supported PENGU’s climb.
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Correction after overbought signals
However, the strong upward move has recently reversed. On Monday, PENGU lost 9% of its value, and the downtrend continued today with another 3% decline. There were no specific news releases or developments related to Pudgy Penguins that would explain this drop.
It appears that profit-taking and technical correction as the main drivers behind the retrace. Indicators such as RSI, MFI, and Bollinger Bands showed overbought conditions earlier last week, suggesting that the correction was likely.
Broader market context remains supportive
Despite the recent pullback, PENGU is still up nearly 50% over the past month and remains 4% higher on a weekly basis. The number of holders has continued to grow, and its market cap remains close to the $1 billion mark. Technical analysts suggest that if momentum continues, PENGU could attempt another move towards its previous peak at $0.017. The RSI has retraced from overbought territory, which may allow for further upward movement if buying interest returns.
Risks for further declines
While the broader outlook for PENGU remains positive, the coin’s performance is heavily driven by hype and market sentiment. If enthusiasm following the ETF filing fades, there is a risk that PENGU could lose its recent gains. As a memecoin, its price action tends to be unpredictable and influenced mainly by short-term narratives and trader interest.
