The newly launched PENGU token has taken the crypto world by storm. However, early signs raises questions for traders as its 24 hour trading volume hits $2.5 billion but market cap is hardly $2 billion.
GopalPudgy Penguins, a popular NFT project, has shaken the markets with its latest venture: the PENGU token. PENGU price is up around 600% in just one day after the launch. Trading activity has been equally explosive, with a 24-hour trading volume of $2.57 billion, surpassing its market cap.Â
Within just an hour of its launch, PENGU price skyrocketed and its token reached an astonishing $2.3 billion market cap. But its inflated trading volume is concerning as it exceeds the actual liquidity PENGU market has.
Why Should PENGU Traders Be Concerned?
Despite the excitement, the PENGU token’s meteoric rise comes with risks. Newly launched tokens often experience a trading volume that exceeds their market cap, a phenomenon currently evident with PENGU. While this creates significant market buzz, it also signals potential instability.
When trading volume is disproportionately higher than the market cap, it often leads to inflated market conditions. This can result in excessive leverage and speculative trading, with liquidity falling short of the volume being traded. Such conditions are prone to heightened volatility, exposing traders to severe risks of price swings.
Analysts suggest exercising caution during these early days. While PENGU’s current trading frenzy may settle within a week as market conditions normalize, the token’s inflated activity poses short-term risks for traders.
Also Read: $PENGU Token Faces Massive Sell-off, $8.74M Sold So Far
