PENGU breaks out of cup and handle with 75% upside potential
PENGU appears poised to extend its ongoing rally after successfully breaking above the neckline resistance of a cup and handle pattern on the daily chart.
Pudgy Penguins ( PENGU ) rose over 23% intraday to hit $0.0177, its highest price since January 29. The latest move brings the token’s gains to over 125% since last month’s low and approximately 370% above its year-to-date bottom.
The token’s rally has propelled it to become the top performer among the top 100 crypto assets by market capitalization, with PENGU now ranking as the 89th largest crypto asset. Its market cap has reclaimed the $1 billion milestone, underscoring a significant return of investor confidence.
The recent surge was catalyzed by news that the U.S. Securities and Exchange Commission has formally acknowledged the filing for the proposed Canary spot PENGU ETF.
The ETF would allocate 80–95% of its assets to PENGU tokens and 5–15% to Pudgy Penguins NFTs, combining exposure to both the token and the broader Pudgy Penguins IP ecosystem.
An acknowledgment from the securities regulator is generally viewed as bullish because it marks the first formal step in the approval process.
Among other on-chain trends supporting a bullish narrative, large holders, or whales, have increased their PENGU holdings by 21% over the past month, now collectively controlling 2.18 billion tokens. This accumulation during recent price dips suggests growing long-term conviction among sophisticated investors.
Source: Nansen
Simultaneously, PENGU’s circulating supply on exchanges has declined notably, from 15.6 billion on June 12 to 14.3 billion as of this week. A reduction in exchange reserves is typically interpreted as bullish, as it indicates reduced selling pressure and a higher likelihood of tokens being held in cold storage or long-term wallets.
Further reinforcing the bullish case, data from CoinGlass shows that PENGU’s weighted funding rate turned positive on derivatives exchanges for the first time since July 1. A positive funding rate indicates that long positions are paying shorts, typically reflecting a shift toward bullish market sentiment and increased demand for leverage on the long side.
PENGU price forms a cup and handle pattern
The daily chart for PENGU reveals a clear cup-and-handle pattern formation, a historically reliable bullish continuation setup. The token bottomed at $0.0037 in March before rebounding to a local high of $0.0175 in May, creating a rounded base followed by a brief consolidation phase, the “handle” portion of the pattern.
PENGU 1-day price chart — July 10 | Source: crypto.news
The cup-and-handle formation is defined by two distinct price swings, an initial drop and recovery forming the “cup,” followed by a smaller, shallower pullback that shapes the “handle.”
It has since broken above the neckline resistance of this structure, which usually signals the start of a potential breakout.
The vertical distance between the cup’s upper resistance and the March low measures approximately 79%. Applying this projected move from the breakout point suggests a potential upside target near $0.0318.
This would represent a gain of around 75% from the current price level. However, this bullish forecast would be invalidated if the token drops below the support level at $0.0142.
At press time, PENGU remains significantly below its December 2024 high of $0.06845, leaving substantial room for upside if bullish momentum continues.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Hashrate orders are booming, why is "AI trading" falling out of favor? JPMorgan reveals the time lag between AI investment and productivity realization
Joseph Lupton from the JP Morgan Global Economic Research Team pointed out in a research report on November 10 that recent improvements in labor productivity have been driven more by capital deepening and increased intensity of factor utilization. The broad efficiency gains from AI, resulting from process reconstruction, data integration, and organizational adjustments, will still take time to materialize. This means orders for chips, servers, and electrical equipment may grow first, but continuous investment returns for computing power operators and end users may not arrive at the same pace.
AI investment enters the "Trough of Disillusionment", the next 18 months will be a life-or-death test!
Goldman Sachs believes that the AI investment cycle is currently in the "trough of disillusionment," but this is not the first time. The core contradiction lies in the fact that the business models of new cloud computing providers are highly dependent on end-user returns from AI spending, while currently "there are basically zero companies that can attribute profits to AI." Social Capital founder Palihapitiya has clearly defined an 18-month key window, during which the market will decide which AI business models are sustainable and which are not.

Anthropic's Core Concern: Revenue Can Be Withdrawn at Any Time, but Computing Power Costs Are Locked in for up to 20 Years
Zheshang Securities believes that Anthropic's revenue is mainly based on usage-based billing, with remaining performance obligations covering only about 5.1 months of annualized revenue, while compute power costs are already locked in with $895.4 billion in irrevocable commitments, some extending as far as 2045. Revenues can be reduced at any time, but costs are non-exitable, creating a highly asymmetric maturity gap between the two—this is the company's real core constraint.

Triple Pressure from the Federal Reserve, Treasury, and Congress; Goldman Sachs: Liquidity Crisis May Occur in 2027
Goldman Sachs warns that the reserve ratio of bank assets has dropped to around 11%, only slightly above the crisis trough of 2019. In the second half of 2027, a deadlock in debt ceiling negotiations will force the Treasury to rebuild the TGA, triggering a "perfect storm" of a sharp drop in reserves and a surge in T-bill supply; combined with stalled money market fund buying, this will create a huge liquidity black hole. The Federal Reserve could be forced into the awkward position of lowering interest rates and launching large-scale bond purchases to rescue the market.

