The hype around the Solana-based token of Pudgy Penguins (PENGU) has stirred up the crypto world. The token’s price rose to $0.068 at the beginning, but within 24 hours, it dumped more than 55% and was at $0.029. This sharp decline was occasioned by heavy selling pressure, especially from the big holders in the market.
The token was launched immediately, followed by high trading volume. Within the first four hours, it generated $425 million in trading volume and has a market capitalization of $2.3 billion. Although a lot of positive sentiment was observed in the beginning, the market sentiment changed rather quickly. The data from DexScreener showed that the sellers dominated the market, with 111,000 selling their tokens against 59,000 buyers.
PENGU’s Volatile Impact
Numerous traders used the token price fluctuations to make a quick buck. According to the analytical service Lookonchain, one of the traders bought 5.3 million tokens and sold them in several portions in just 20 minutes, making a profit of $13.72 million. These are the speculative trading which led to the creation of a volatile market and further decline of prices.
The token’s performance also affected the other meme coins in the market as well. Dogecoin, Shiba Inu, and PEPE all dropped with Dogecoin down by 4.80%, Shiba Inu by 5.12%, and PEPE by 7.73%. The total market capitalization of meme coins fell by 4.46% within the last 24 hours to $125 billion. These tokens are linked in some way and this means that the effect was felt across a broad area.
This only compounded the problem as PENGU decided to airdrop NFT holders. The token NFTs saw their floor price nosedive from 33 ETH to 17 ETH. This is because the value of the token was reduced, which in turn reduced the perceived value of the NFT collection. This is a double whammy to the Pudgy Penguins ecosystem and the community was shocked.
PENGU Faces Challenges
Formerly the second biggest NFT project in terms of market capitalization, Pudgy Penguins are now ranked third. This was succeeded by Bored Ape Yacht Club whose floor price stands at 18.30 ETH. This change is quite a blow for the Pudgy Penguins community. Market sentiment in the ecosystem has now been significantly dented.
During the launch phase, many leading digital asset trading platforms such as Binance, OKX, Bybit and KuCoin had added token to their list of supported assets. Availability also led to awareness and high transaction turnover. But it also attracted the blink-trade, the people who bought tokens with the expectation to sell them at a higher price and make a profit quickly, which led to the decline.
This has become one of the most important problems of PENGU as it requires to have long-term holders. Many of the users cashed out their tokens once they got them. This lack of investors has left the token to be exposed to market risks. The sentiment around memecoin and the Pudgy Penguins ecosystem has been getting worse recently.
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The PENGU launch is a case in point in the highly unpredictable nature of the crypto market. This is rather typical for such growth – quick gains result in quick losses. Sustainable growth is only possible with a powerful market environment and support from the people. The Pudgy Penguin ecosystem will have to change in order to continue existing and growing.
Conclusion
PENGU’s first entry, therefore, has had a definite turbulence effect on the market. The token’s sharp decline and the subsequent impact on NFTs and meme coins clearly show how even adherents of these innovations can face losses. The token team needs to reshape their ecosystem and, first of all, bring back the trust of the community. Whether they will achieve this remains to be seen, and the fate of one of the crypto world’s most famous names will be decided.
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FAQs
Why did PENGU’s price drop by over 55% within 24 hours?
Major holders’ dumping pressure wiped out a significant amount of the token’s value.
What was PENGU’s trading volume during its launch phase?
Token achieved a trading volume of $425 million in the first four hours since its inception.
How did PENGU’s performance impact the NFT market?
The price of the token fell, which lowered the minimum price for Pudgy Penguins from 33 ETH to 17 ETH.
What challenges does the PENGU token face?
Token faces the problem of low liquidity, much of which is short-term, and the negative impact on market sentiment.
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