Key Takeaways
Initial fears that PUMP buyers would quickly take profits and drive the price into a bearish slump may have come true. The lack of airdrop plans in the immediate future also hurt sentiments, and could send the price down by upto 27%.
Pump.fun [PUMP] saw heavy selling pressure in recent days. After the ICO, the Solana [SOL]-based memecoin launch platform’s token briefly surged to $0.0067 on Tuesday, 15 July. Since then, however, the price has fallen by 56%.
In fact, tokenomics revealed that 33% of the total supply released on day 1. According to critics, this gave early investors the opportunity to cash out early, sending the price spiraling lower. This scenario came true over the past week.
The recent weakness across the crypto market saw Ethereum [ETH] slide from $3,860 to $3,657 and caused $190 million worth of liquidations in just 24 hours. It undoubtedly had a negative impact on PUMP prices too.
Additionally, project co-founder Alon Cohen said an airdrop is not coming anytime soon. Investor confidence tanked as this news emerged, with large holders already selling their tokens.
What to expect next for PUMP?
Source: PUMP/USDT on TradingView
The 1-hour price action revealed that a sizeable fair value gap (white) was left behind after the drop on 23 July. At the time of writing, this gap had not yet been filled yet. The market structure remained strongly bearish too.
Fibonacci retracement levels showed that a potential price bounce would run into significant resistance at the $0.0034-$0.0038 area. A retest of this region would be an opportunity to sell PUMP or go short.
The technical indicators supported this bearish notion. The CMF was below -0.05 to signal greater capital flows out of the market. The OBV trended downwards in recent days to highlight greater selling pressure on the Pump.fun native token.
The RSI, though it formed a hidden bullish divergence, did not bounce meaningfully higher. Together, the indicators and price action highlighted intense bearish pressure in the short-term.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
