Why can the PENGU liquidation map trigger a short term bullish wave?

PENGU, the native token linked to the leading NFT project Pudgy Penguins, has fallen nearly 6% in the past 24 hours as trading volume has seen a notable spike.

However, as investor interest increases, on-chain data signals that the price of PENGU will soon rise again.

PENGU is preparing for the next price increase

Two important on-chain indicators suggest that the price surge may not be over yet. First, analyzing the liquidation map of Pengu reveals a significant liquidity cluster just above the current price, around $0.045.

Liquidation map of PENGU | Source: CoinglassThe liquidation map is used to identify price levels where there are many leveraged positions that could be liquidated. These maps highlight areas of high liquidity, often color-coded to represent intensity, with brighter (yellow) areas indicating greater liquidation potential.

When liquidity clusters form at the current market price of an asset, they often act like magnets, pulling the price up. These areas are often targets for traders looking to trigger stop-loss orders or forced liquidations. Because they know this can create strong buying pressure and drive short-term price increases.

For PENGU, the liquidity cluster around the $0.045 level may act as a price magnet, potentially pulling the price of this memecoin higher as traders push the market towards that area.

Furthermore, the Long/Short ratio of Pengu has risen to a monthly high of 1.06, indicating strong optimistic sentiment from the derivatives trading community.

Long/Short ratio of PENGU | Source: CoinglassThe Long/Short ratio measures the proportion of opened Long positions (betting that the price will increase) compared to opened Short positions (betting that the price will fall) in the futures market.

When this ratio exceeds 1, it means that there are more traders holding Long positions than Short positions. In the case of PENGU, this indicates that market participants are increasingly betting on the likelihood that the price will continue to rise.

The support zone may determine the next big move of PENGU

At the time of writing, PENGU is trading at $0.033, holding above the support level of $0.029. If the buying momentum continues to strengthen, this memecoin may break towards the area of $0.044, near the liquidity concentration zone.

PENGU Price Analysis | Source: TradingViewHowever, if selling pressure returns, breaking the support level of 0.029 dollars could open up the risk of a deeper correction to the region of 0.019 dollars.

Minh Anh