Pudgy Penguins ($PENGU) Shows Fragile Recovery as "Smart Money" Accumulation Spikes

The memecoin Pudgy Penguins ($PENGU) is showing tentative signs of recovery after suffering a sharp hit in the recent market crash, rebounding 17% at the start of the new week and tracking a broader altcoin uptrend.

Despite the recent rally, the memecoin’s quarterly returns currently sit at a negative 7%, following highly profitable Q2 (171.7%) and Q3 (88.5%). Market analysts are now keenly watching to see if Q4 can reverse this trend.

Technical and On-Chain Signals Point to Renewed Interest

Price Action & Chart Analysis: 

On the 3-hour chart, $PENGU has regained some ground, trading near $0.026 after its plunge to $0.005. While the structure remains bearish, the price has moved back above the mid-band of the Bollinger Bands, an early indication of cooling volatility and recovery. However, a sustained breakout requires reclaiming the $0.030 support to pave the way for a move toward the immediate target of $0.040 and potentially the previous high of $0.046.

Capital Inflow and Conviction:

On-chain data suggests strong confidence in $PENGU:

• "Smart Money" Inflow has spiked by 6.3 times its average, indicating sophisticated investors are accumulating the token at a discount.
• Spot Accumulation is evident, with Net Outflows removing approximately 8.78% of the Supply on Exchanges.
• Top Holders increased their positions by 3.2%, demonstrating high conviction even during the crash.

Derivatives Market Resets for Bullish Momentum

The rebound is also supported by a reset in derivatives and trading activity:

• Long Liquidations totaled $52 million, which historically clears overly leveraged positions and sparks short-term rallies across crypto markets.
• Open Interest (OI) has rebounded to $160.27 million (from a post-crash low of $134 million), with the current Volume improving to $1.07 billion.

The simultaneous recovery in Open Interest and the liquidation-driven position reset suggest a renewed bullish setup. If the current capital inflows and strong conviction from top holders can be sustained through Q4, $PENGU is poised to retest the $0.040 to $0.046 price targets, contingent on a stable "risk-on" sentiment in the broader market.

October 2025, Cryptoniteuae