PUMP Token Plunges 40% Since Launch: Rebound Incoming?
Key Points
The PUMP token has experienced a sharp decline, falling over 40% due to substantial sell-offs by major holders. Despite the current bearish outlook, significant exchange outflows and an oversold Relative Strength Index (RSI) suggest potential accumulation and a possible rebound.
Pump.Fun's PUMP token, recently introduced to the market, has seen its value decrease below its Initial Coin Offering (ICO) price.
According to data from CoinMarketCap, the token has lost more than 40% of its initial value since launch, and the decline continues.
Why is PUMP's Price Declining?
As of the latest update, PUMP recorded an additional 15% drop and is currently trading at $0.00368. Despite the price decrease, there has been increased activity from traders and investors.
CoinMarketCap data indicates that PUMP's 24-hour trading volume has increased by 32%, reaching $721 million compared to the previous day.
This surge in trading volume, coupled with the price dip, indicates strong bearish momentum, suggesting that the downward price trend may continue in the short term.
Recent reports from crypto experts attribute the ongoing price decline to profit-taking by early investors.
According to experts, PUMP's price has fallen below its private sale price of $0.004 due to significant selling pressure from top holders.
For instance, one investor who initially purchased 25 billion PUMP for $100 million has already sold 17 billion tokens. Another wallet holder, who acquired 12.5 billion PUMP, has sold their entire position for $14.31 million.
This large-scale sell-off by major holders appears to be the primary factor driving PUMP's current price decline.
$2.16M PUMP Outflow: An Accumulation Signal?
Amid the price downturn, some investors and long-term holders are capitalizing on the opportunity to accumulate more tokens.
Data from CoinGlass reveals that exchanges worldwide have recorded an outflow of $2.16 million worth of PUMP tokens in the past 24 hours.
In the current market environment, this outflow from exchanges may indicate potential accumulation, which could alleviate selling pressure and stabilize the price.
However, trader sentiment remains largely bearish. Data indicates that PUMP's Long/Short Ratio is at 0.88, reflecting strong negative sentiment among investors.
Specifically, only 47% of traders are holding long positions, while 53% are betting against the token.
While bearish sentiment prevails, the potential accumulation of PUMP tokens could mitigate the rate of price decline.
PUMP's Price Action and Technical Analysis
The key question remains: Can PUMP recover, or will the decline persist?
Technical analysis suggests that PUMP is currently in a downtrend but is showing signs of forming a bullish price action pattern.
The four-hour chart indicates that PUMP is forming a bullish falling wedge pattern. As of the latest analysis, the price is near the lower boundary, hinting at potential upward momentum.
To confirm a trend reversal, PUMP would need to break out of this bullish pattern and close a daily candle above the $0.0042 level.
The asset’s Relative Strength Index (RSI) is at 32, indicating it is oversold and potentially poised for a price recovery.
Disclaimer: This analysis is for informational purposes only and not financial advice. Trading cryptocurrencies involves risk, and you could lose money. Conduct thorough research before making any investment decisions.