Pudgy Penguins Signals Possible Bullish Reversal

Pudgy Penguins Signals Possible Bullish Reversal

Recently on X, crypto analyst Ali Martinez identified a few positive advancements on PENGU’s hourly time frame. Primarily, the Tom Demark (TD) Sequential indicator, which is used to spot potential price reversals, has registered a buy signal.

According to Martinez, the TD Sequential has concluded its nine-candle set-up phase, a string of consecutive red candles that often signal that an asset is building its bottom. This long-established indicator has historically predicted upward movements in both traditional and cryptocurrency markets.

Another key signal supporting the bullish case is the emergence of bullish divergence in the Relative Strength Index (RSI). This momentum indicator, which measures overbought and oversold conditions, fell below 30, indicating oversold territory, but has since recovered.

What’s interesting is that although the RSI is rising, PENGU’s price continues to decline, forming a divergence traditionally seen as a precursor to an upward reversal.

PENGU also appears to be echoing off the bottom of a near-term Parallel Channel, a technical formation in which the asset’s price moves back and forth between two flat lines.

This downtrending line is acting as support, and with PENGU currently near it, the analysts believe the coin is testing a critical support level from which a bounce could occur.