PENGU Tests Key Resistance as SEC Delays Pudgy Penguins ETF Decision

The U.S. Securities and Exchange Commission (SEC) has pushed back its decision on Canary Capital's proposed Pudgy Penguins ETF to March 11, prolonging regulatory uncertainty according to reports.

Derivatives volume and open interest for PENGU have declined, suggesting traders are waiting for a clearer directional signal before committing to positions as market data shows.

The Pudgy Penguins token, known by the ticker PENGU, continues to trade near critical technical levels amid regulatory uncertainty surrounding its proposed ETF. PENGU is currently near $0.012, having gained roughly 23% over the past week, but remains below key resistance levels defined by a descending trendline extending from November highs near $0.038–$0.040 according to technical analysis. This resistance has repeatedly rejected upward attempts, keeping the price range-bound.

The SEC's extended review of the Pudgy Penguins ETF, filed by Canary Capital, adds complexity to the market dynamic. The proposed ETF would provide investors with exposure to both the PENGU token and physical Pudgy Penguins NFTs, marking a potential milestone for crypto-native ETFs in traditional markets as reported. The delay pushes the decision deadline to March 11, and regulators have not indicated any leaning toward approval or rejection, maintaining market ambiguity.

Market activity suggests reduced leverage among traders, with derivatives volume and open interest declining by 11% and 0.43%, respectively according to trading data. This indicates that participants are cautiously monitoring developments, particularly around the SEC's final decision. A daily close above the $0.0135–$0.0140 resistance zone would mark the first significant shift away from sustained downside pressure as technical indicators suggest.

What Technical Level Matters for PENGU?

The PENGU price is currently trading near $0.0130–$0.0135, a historically significant resistance zone where selling pressure has repeatedly emerged. A breakout above this level could signal a broader bullish reversal, as indicated by the right-angled descending broadening pattern according to chart analysis. Each attempt to break through this resistance has previously failed, but recent price action suggests renewed buying interest. A successful close above this zone would validate the pattern and potentially open the door toward the $0.01922 level as technical analysis indicates.

The price has also retested the 50-day moving average at $0.01062, a level that previously acted as dynamic resistance. Reclaiming this level marked a shift in short-term momentum, and the price is now poised to test resistance again according to market data. A sustained move above this level would likely attract further momentum participation from traders.

How Does the ETF Delay Impact Market Sentiment?

The ETF delay has deepened caution among market participants. PENGU has experienced a 6% price decline in the 24 hours following the announcement of the extension, highlighting the strong influence of ETF-related expectations on the token's price action as market data shows. Derivatives trading activity has also softened, with open interest dropping by 2% to $112.32 million according to trading reports. This suggests traders are reducing exposure while awaiting clearer regulatory signals.

The proposed ETF's design introduces added complexity due to its inclusion of both PENGU tokens and physical Pudgy Penguins NFTs. Regulators are reviewing how these assets are priced, stored, and brought into compliance, which is more intricate than typical crypto ETF filings according to regulatory analysis. This has contributed to the extended review timeline and increased uncertainty for market participants.

What Could Happen If PENGU Breaks Out?

A breakout above the $0.0135–$0.0140 resistance zone could signal the start of a new bullish phase for PENGU. Historical price behavior suggests that a confirmed breakout would likely invite fresh momentum participation, as traders recognize the structural shift according to technical analysis. Based on the depth of the pattern and measured move projections, a successful breakout could lead to a price target of $0.01922, representing a potential 45% upside from current levels as projected.

However, caution remains warranted until a clear breakout and follow-through occur. Short-term pullbacks, including a possible retest of the 50-day moving average, should not invalidate the bullish setup as long as higher-low structures continue to form according to market analysis. Until the market confirms the breakout, traders are advised to monitor key support and resistance levels closely.