Pump.fun’s native token, PUMP, is once again in the spotlight after sharp volatility brought its price back near $0.0027.
Despite heavy buyback efforts, technical analysts warn that the token may revisit lower levels around $0.00232 in the short term.
Price Action and Market Outlook
At the time of writing, PUMP is trading at $0.002769, down 2.6% over the past week, with a market cap of just under $1 billion. Trading activity shows resistance near $0.0030, while chartists highlight potential downside risk toward $0.00232 if bearish momentum continues.
Ali Martinez, a popular analyst, noted that price action suggests another leg down, reinforcing caution among traders who have been eyeing short-term breakdowns. RSI readings remain elevated, recently touching 70.81, hinting at near-overbought conditions, while MACD levels show only weak bullish divergence.
Pump.fun’s Buyback Strategy
Since August 6, Pump.fun has been deploying over $1 million daily to repurchase PUMP tokens using platform revenue. In just 10 days, this added up to more than $33 million worth of buybacks, significantly reducing circulating supply.
The move has been framed as a confidence signal from the team while also acting as a mechanism to counteract selling pressure. This strategy became essential after data showed that by late July, around 60% of presale participants had already exited their positions, contributing to sustained selloffs.
Artificial Scarcity or Sustainable Growth?
While buybacks help stabilize prices in the short term, some investors remain skeptical, arguing that this form of artificial scarcity cannot replace long-term organic demand. If user adoption and platform revenue fail to expand at the same pace, PUMP could face renewed downward pressure once buybacks slow.
Still, the tactic has prevented deeper losses so far, allowing PUMP to hold a position in the top 100 cryptocurrencies by market cap.
What to Watch Next
Analysts are now monitoring two critical developments:
- Key technical levels: $0.00232 as support and $0.00300 as resistance. A break on either side could determine PUMP’s next big move.
- Sustainability of buybacks: If Pump.fun continues deploying $1M+ daily, market confidence may build – but slowing down could spark fresh selloffs.
For now, PUMP sits at a crossroads. Either continued buybacks push it back above resistance, or trader exits drag it down toward the levels chartists are warning about.
The information provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/market/pump-token-holds-top-100-spot-but-analysts-fear-major-breakdown-ahead/