The highly anticipated launch of PENGU token, airdropped to Pudgy Penguins NFT holders, has turned sour as the token's price nosedived by over 50% shortly after trading commenced. Initially surging to $0.068, PENGU quickly fell to $0.031 under heavy sell pressure, marking a sharp reversal in sentiment.

NFT Prices Take a Hit

The token’s plunge coincided with a steep decline in Pudgy Penguins NFT prices, further exacerbating the market downturn. The collection’s floor price dropped from 33 ETH to 16 ETH, losing half its value. The Pudgy Penguins collection, previously ranked as the second-largest by market cap, fell to third place, overtaken by Bored Ape Yacht Club with a floor price of 18.89 ETH, according to CoinGecko data.

Market Cap and Trading Volume Decline

PENGU debuted with a $2.3 billion market capitalization and generated over $90 million in trading volume within hours. At press time, the market cap had dropped to less than $1.9 billion.

Trading activity spiked dramatically, with $425 million in volume recorded in the first four hours alone. GeckoTerminal data revealed more than 250,000 on-chain holders, but a significant imbalance between sellers (111,000) and buyers (59,000) added downward pressure to the token’s price, according to DexScreener.

Quick Profits Drive Volatility

On-chain analysis from Lookonchain revealed that many traders used the launch to make quick profits. One prominent example involved a trader who bought 5.3 million tokens and sold them in rapid succession within 20 minutes, pocketing $13.72 million.

This pattern underscores the lack of long-term holders, as many users quickly dumped their tokens after the airdrop, contributing to the sharp decline in PENGU’s value.

Exchanges Support Launch, but Sentiment Sours

Major cryptocurrency exchanges, including Binance, OKX, Bybit, and KuCoin, listed PENGU for spot trading at launch. However, the overwhelming sell pressure from airdrop recipients and speculative traders has raised questions about the token’s sustainability and market outlook.

Looking Ahead

The PENGU token’s rocky start highlights the challenges of balancing demand and supply in airdrop-driven launches. While Pudgy Penguins remains a beloved NFT brand, the simultaneous collapse in both the token and NFT floor prices signals a need for stronger mechanisms to stabilize value and encourage long-term holding.

For now, both PENGU token holders and Pudgy Penguins collectors face uncertain prospects as the market adjusts to this volatile debut.