PENGU Surges 22% on ETF News, Traders Remain Cautious

PENGU, the memecoin associated with the Pudgy Penguins NFT collection, saw a notable surge of 22% following the announcement that the Chicago Board Options Exchange had filed for the first ETF combining a memecoin and NFTs. This development has generated significant interest and speculation within the cryptocurrency community.

The proposed ETF, known as the Canary PENGU ETF, aims to allocate a substantial portion of its portfolio to PENGU, with 80-95% dedicated to the memecoin and 5-15% to Pudgy Penguin NFTs. Additionally, the ETF will include SOL and ETH to cover operational costs. If approved, this ETF would be the first regulated fund to pair a memecoin with NFTs, marking a notable milestone in the cryptocurrency market.

Despite the positive news, there are indications that traders remain cautious. The Funding Rate for PENGU remained negative across all major exchanges, suggesting that most positions are leaning short. This bearish sentiment is further supported by a 62% rise in Open Interest, driven primarily by short positions. On-chain data also reflects this caution, with Weighted Sentiment dipping to -0.116 as of the 27th of June, down from a recent peak.

Investors are also actively taking profits, as indicated by the memecoin’s Netflow remaining in positive territory, reaching a high of $3.78 million. A positive Netflow typically precedes higher selling pressure, which could result in downward pressure on prices. This dynamic suggests that while the ETF news has triggered a short-term rally, the overall market sentiment remains cautious.

Technical indicators such as the Relative Strength Index (RSI) and the Directional Movement Index (DMI) show bullish momentum. The RSI hit 57.17, pushing into bullish territory and rejecting its previous downtrend. The DMI showed the +DI at 25.2, well above the -DI at 12.46, a setup that historically favors buyers. However, $0.012 remains a key resistance level. If PENGU fails to break through this level cleanly, a retrace toward $0.010 could follow, especially if the ETF speculation fades before regulatory approval is granted.

In summary, while the ETF news has provided a significant boost to PENGU, the overall market sentiment remains cautious. Traders are taking profits, and technical indicators suggest that $0.012 is a crucial resistance level. The future of PENGU will depend on whether it can sustain its momentum and break through this resistance, or if the bearish sentiment will prevail.