Whalesbook
Pudgy Penguins' token price surged after a large number of tokens became available. However, on-chain analyst Bradley Park believes this rally may not point to lasting growth. He suggests the price jump likely helped major token holders sell off their holdings after the April 17 unlock, which released about 703 million PENGU tokens.
Analyst Spots Selling Risk
Bradley Park, founder of DNTV Research, believes updates like Pengu Card and PenguBot are less important than the token unlock and the resulting price moves. He pointed to a common pattern: large token releases are often followed by price rallies that help early investors unload their tokens.
Details of the Token Unlock
On April 17, approximately 703 million PENGU tokens became available, making up about 0.79% of the total 88 billion supply. On-chain data revealed that the main wallet holding these tokens quickly sent them to 19 different addresses. Park explained this 'claim and spread' move is often a sign that large amounts are about to be sold without drastically affecting the price.
Futures Market Boosts Rally
The token's price increase also coincided with higher activity in the futures market, pushing Pudgy Pengu's open interest from $36 million to $59 million. The rally was further fueled by repeated short squeezes, which forced traders betting on a price drop to buy back tokens, driving the price up. This situation is ideal for major holders wanting to sell, as outside buyers soak up their supply.
Why Analysts Suspect Selling
Park's main idea is that the rally was designed to offer a way out for those who received tokens from the unlock. He argues that positive ecosystem news created buying interest, allowing recipients to sell their newly acquired tokens at a profit. This suggests the news acted as a cover for selling, rather than driving true demand. Future monthly token releases, continuing at least until July, will be key to understanding if the rally represents lasting demand or just a temporary supply event.