The launch of Pudgy Penguins (PENGU) caused a major stir in the crypto market. The price surged nearly 500% on the first day, only to drop sharply. Will the success continue?
On Dec. 17, during the first hours of trading, PENGU’s price increased from $0.01141 to $0.06845, reaching an all-time high (ATH), according to CoinGecko data. This marked a rise of 499.87%.
The price then declined, falling to $0.031 by Dec. 18 – a 55% decrease from the ATH.
Source: CoinGeckoPrice volatility following token listings is common, as some traders seek quick profits, often leading to sharp declines. Tokens with limited liquidity during initial trading are particularly susceptible to such fluctuations.
This raises a key question for traders: should they hold or sell after a token’s listing?
Spot on Chain analyzed the behavior of the top 11 largest holders of PENGU.
As of Dec. 18, approximately 351 million PENGU held by these 11 addresses had been sold. Most of these holders sold some of their tokens, while only three retained their holdings.
The largest PENGU claimant, who obtained 177.3 million tokens via an airdrop, transferred all of them to Binance.
Source: Spot on ChainWill PENGU Revitalize the NFT Market?
Pudgy Penguins is a well-known NFT brand that previously released another collection, Lil Pudgys, featuring a similar theme. Both collections are issued on the Ethereum (ETH) blockchain.
The launch of PENGU has drawn attention to this ecosystem. According to NFTpulse, Pudgy Penguins and Lil Pudgys ranked #1 and #2 among the top NFT collections over the past 7 days, with trading volumes increasing by 120.7% and 151.1%, respectively.
Trading revenue also rose, with Pudgy Penguins up by 237.5% and Lil Pudgys by 205.9% during the same period.
Source: NFTpulseDespite these gains, the overall NFT market remains under pressure.
A significant portion of NFTs have been described as ‘dead.’ NFTevening reported that 96% of NFT projects failed:
‘2023 saw the highest number of dead NFTs, with nearly one-third of them dying that year.‘
Despite the overall decline in the NFT market in recent years, the Pudgy Penguins collection demonstrated growth in 2023.
According to NFT Price Floor, the collection recorded a total trading volume of 149,661 ETH in 2023, up 244.34% compared to 43,462 ETH in 2022.
The floor price also increased, rising from 5.99 ETH in 2022 to 10.64 ETH in 2023.
Source: NFT Price FloorWhy Did the PENGU Airdrop Cause a Stir Despite the NFT Market’s Decline?
The Pudgy Penguins airdrop has sparked interest in the crypto market for several reasons.
One notable factor is that while the NFT collection is on Ethereum, the PENGU token operates on the Solana (SOL) blockchain. According to Igloo, an active member of the Pudgy Penguins community, this decision was made to attract a broader audience.
Previously, we noted that 2024 is a pivotal year for Solana, which recovered from a significant correction and reached new ATHs. This rebound was largely attributed to the ecosystem’s growth in decentralized finance (DeFi) and meme coins.
Solana’s ecosystem operates in a way that one project can support the development of others. For example, when a meme coin is launched, decentralized exchanges (DEXs) like Raydium often become the primary trading platforms, providing liquidity for the token.
A similar scenario occurred with PENGU. Although the token is available on centralized exchanges (CEXs), Raydium accounts for 13.48% of its trading volume, according to CoinGecko, making it the third-largest trading venue for PENGU.
The top two platforms by trading volume are the CEXs LBank (33%) and Binance (20.49%).
Source: CoinGeckoThe decision to launch PENGU on Solana has allowed the token to access decentralized exchanges.
According to GeckoTerminal, Pudgy Penguins ranks as the top token by trading volume on DEXs, with $299.79 million traded in the past 24 hours.
For comparison, Unicorn Fart Dust (UFD) holds the second position with $139.35 million, followed by Fartcoin (FARTCOIN) with $105.46 million.
Source: GeckoTerminalWill PENGU Continue to Grow?
After an airdrop, it is common to see a wave of sales. Analysts have already observed several large holders, or whales, selling off their PENGU tokens, including early investors who may have ties to the Pudgy Penguins brand.
For instance, one address received 888 million tokens and had sold 169 million as of Dec. 18.
Such early investors holding large amounts of PENGU are likely to contribute to price volatility in the near term due to sell-offs.
Currently, it is difficult to predict the long-term price trajectory of PENGU due to its recent launch and limited available data.
Looking at similar projects, ApeCoin (APE), associated with the Bored Ape Yacht Club NFT brand, may offer insights. APE reached its ATH of $26.70 on Apr. 28, 2022. Since then, its price has fallen by almost 95%, currently trading at $1.3.
APE gained renewed attention in Oct. 2024 when its price rose above $1 following the launch of ApeChain and the introduction of automatic staking for token holders.
Since then, APE has maintained a price above $1, although this is still significantly below its 2022 peak.
Source: CoinGeckoPENGU may follow the path of APE, where the price deviated significantly from its ATH despite ongoing project updates. A bull run in the crypto market could also impact the price trajectory.
However, PENGU benefits from the support of Solana, whose ecosystem is actively expanding and advancing in DeFi.
The post PENGU Price Spikes 500% After Airdrop, Then Drops – Is This the End? appeared first on Cryptonews.
