Is PENGU Approaching a Bottoming Cycle Amid Diverging On-Chain and Technical Signals?

The Pudgy Penguins (PENGU) token has long been a volatile fixture in the memecoin space, but recent on-chain and technical developments in late 2025 have sparked renewed debate about its potential to stabilize or collapse. As the token navigates a critical juncture, investors must weigh diverging signals from smart money positioning and technical indicators to assess whether PENGU is nearing a bottoming cycle-or teetering on the edge of a deeper correction.

Technical Divergence and Key Support/Resistance Levels

PENGU's price action in December 2025 has been marked by sharp swings. A 37% surge between December 1 and 2 pushed the token above short-term resistance at $0.0129, with bulls eyeing a breakout above $0.0138 to reinvigorate the rally. However, technical indicators tell a more nuanced story. While the RSI initially showed bullish momentum, a bearish divergence emerged in the 14-day RSI, signaling weakening conviction in the upward trend. This divergence, combined with the token's constrained movement within narrow Bollinger Bands ($0.00951–$0.0136), suggests a potential for a breakout-but not necessarily in a bullish direction.

Historical context adds further complexity. In July 2025, PENGU surged 480% to $0.041, driven by exchange listings and influencer hype, with key resistance levels identified at $0.05 and $0.08. By late 2025, however, the token had corrected to $0.0128, with critical support levels now at $0.0110 and $0.0093. A daily close below $0.0110 could trigger a deeper pullback, testing the $0.0093 level-a threshold that, if broken, might signal a return to the $0.0035 support zone observed earlier in the year.

Smart Money Positioning: Accumulation vs. Bearish Shifts

On-chain data reveals a tug-of-war between accumulation and profit-taking. Whale activity has been a double-edged sword. While large holders reduced spot holdings by 3.62% in December 2025, shifting toward bearish perpetual positions, they also demonstrated strategic buying during dips. For instance, a prominent whale withdrew 272 million PENGU ($2.52 million) from Binance in late 2025, signaling confidence in the token's long-term potential. Similarly, elevated trading volumes and withdrawals from platforms like Coinbase Prime suggest reduced sell-side liquidity, hinting at a possible consolidation phase.

Yet, the bearish narrative remains strong. Perpetual traders slashed long exposure by 17% in 24 hours, reflecting a sharp loss of conviction. This aligns with broader market dynamics: as Bitcoin surged above $92,000 in early 2026, whale activity across the crypto market spiked, but PENGU-specific accumulations were concentrated in the $0.02–$0.03 range-a zone that had previously acted as a support level. While this could indicate a floor forming, the token's volatility (14.46% in late 2025) complicates the picture.

Interplay of Signals: A Fragile Equilibrium

The interplay between technical and on-chain signals paints a fragile equilibrium. PENGU's current price near $0.0121 sits just below the $0.0129 resistance, with a sustained break above $0.0138 needed to invalidate the bearish RSI divergence. However, even a successful breakout may face headwinds from whale activity. For example, a $273,000 whale purchase in late November 2025 near $0.046 suggests that large holders are selectively accumulating, but their reduced spot holdings in December imply caution.

Historically, PENGU has broken out of patterns like falling wedges and descending triangles, signaling bullish momentum if it sustains above key levels. Yet, the token's long-term resistance at its all-time high ($0.05738) remains distant, and a failure to hold above $0.009732 could force a return to the $0.0100 zone. This dynamic underscores the importance of monitoring both technical levels and whale behavior for confirmation.

Conclusion: A High-Risk, High-Reward Scenario

PENGU's path forward hinges on resolving the tension between diverging technical signals and mixed smart money positioning. While whale accumulation and elevated volumes suggest a potential bottoming process, the bearish RSI divergence and reduced long exposure among perpetual traders indicate lingering risks. Investors should closely watch the $0.0110 support level and whale activity in the $0.02–$0.03 range for clues. A successful breakout above $0.0138 could reignite bullish momentum, but a breakdown below $0.0093 would likely trigger a deeper correction. In this high-volatility environment, patience and a clear risk management strategy are paramount.