PENGU Notches Double-Digit Gains as Bitcoin Hits $78K Amid $418M Liquidation Spree

Bitcoin has been on a steady uptrend in April, with shallow pullbacks, allowing altcoins to extend their gains.

Pudgy Penguins meme coin PENGU led altcoin gains, up 12.6% on the day, while Cosmos (ATOM), Aptos and Bitcoin Cash saw gains of over 5% over the past 24 hours.

The altcoin surge comes as Bitcoin hovers around $78,000, up nearly 2% over the past 24 hours, according to CoinGecko data. If the bullish momentum persists, the leading crypto could revisit $80,000 for the first time in over two and a half months, analysts suggested.

“What we’re seeing right now is a mix of both early rotation and mechanically driven upside,” Wenny Cai, founder of Anchored Finance, told Decrypt. “There is some genuine capital moving out along the risk curve as Bitcoin consolidates, particularly into higher-beta majors and select narratives. But the velocity of the move suggests that short covering and leverage are amplifying it.”

As a result, almost $418 million in leveraged positions have been wiped out, with more than $286 million coming from bears or short sellers, suggesting these investors were caught off guard, per CoinGlass data.

Investor sentiment has flipped bullish, with users on prediction market Myriad, owned by Decrypt’s parent company Dastan, assigning a 75% chance that Bitcoin’s next push could send it to $84,000. Those odds have increased from roughly 45% on April 1, underscoring increasing investor optimism amid the ongoing uptrend.

Looking ahead

Nevertheless, the bullish outlook remains uncertain. From a technical standpoint, a Schwab strategist identified $83,000 as a key resistance level, which is the average cost basis of Bitcoin ETP investors, according to a previous Decrypt report.

Beyond that is $87,000, which is the 200-day simple moving average, a breakout above which usually signals a shift in the long-term trend, favoring bulls.

“The $83,000 benchmark matters because it’s where a large cohort of spot ETP buyers are sitting at breakeven, and reclaiming it would be financially and psychologically significant for a huge pool of relatively recent institutional capital,”  Orkun Kılıç, co-founder and CEO of Chainway Labs, told Decrypt.

However, until these key hurdles are overcome, the outlook remains uncertain. The parallels to the Middle East conflict are telling: just as that situation remains unresolved, so too does Bitcoin’s path above $83,000.

Altcoins will become “fragile” if the leading crypto fails to overcome the ETP cost basis, Cai said. “Most of this rally is predicated on Bitcoin stability, not necessarily Bitcoin strength.”

As a result, a rejection here would likely “tighten liquidity conditions across the market, and altcoins—being higher beta—would feel that disproportionately.”

Investors should watch out for assets whose gains have “run ahead of fundamentals,” Cai explained, adding that these tokens could lead to a fast unwind of leveraged positions.

While optimism surrounding Bitcoin remains strong, investors remain skeptical about altcoins, with Myriad users seeing just a 22% chance that an “altseason” kicks off before July.