Pudgy Penguins (PENGU) has seen a significant surge over the past 24 hours, climbing more than 30 percent to reach $0.0196 on July 10. This rally follows news that the US Securities and Exchange Commission (SEC) has acknowledged Canary’s application for a PENGU exchange-traded fund (ETF). The price action has also formed a bullish flag pattern, indicating that the rally may just be beginning, with a potential target of $0.035.
Bull Flag Breakout Signals Strong Uptrend
PENGU has been consolidating within a bull flag formation, and the recent price spike confirms a breakout, suggesting that bullish momentum is gaining strength. However, for the breakout to be fully validated, the token must close above the key resistance level of $0.0156 and later retest it as support. Achieving this would confirm the continuation of the upward trend.
Reaching the projected target of $0.035 would mark the highest price level for PENGU since January. Technical indicators support this bullish outlook. The Average Directional Index (ADX) is rising, signaling a strengthening trend, while the Chaikin Money Flow (CMF) is making higher highs, pointing to increasing capital inflows.
Ecosystem Growth and ETF Buzz Fuel Optimism
Beyond technicals, developments within the Pudgy Penguins ecosystem are also contributing to the positive sentiment. The SEC’s acknowledgment of Canary’s spot PENGU ETF filing, submitted in late June, has sparked renewed investor interest. This milestone brings the ETF one step closer to potential approval.
Open interest (OI) in PENGU has surged by 52 percent in the past day, reaching $278 million. However, much of this increase appears to be driven by traders opening short positions, as reflected in the negative funding rates and declining long-to-short ratios on platforms like OKX and Binance.
Outlook: Short Squeeze Could Trigger Next Leg Up
Despite the bearish positioning, the current setup could lead to a short squeeze, which might fuel the next phase of the rally. If the bullish momentum continues and the breakout is confirmed with a strong daily close, PENGU could remain a standout performer in the broader crypto market.
