SUN price has been consolidating after getting that first huge rally following the launch of the platform and subsequent shilling by Tron Founder Justin Sun. The retrace has also been exacerbated by general market conditions owing to the Bitcoin price erratic movements. However, Sun announced a 100% on-chain buyback and burn for SunPump. This is expected to boost SunPump price to new highs.
Justin Sun’s 100% Burns Impact on SUN Price
Initially, the community had suggested burning the liquidity LP tokens as a way of gaining the trust of the broader crypto community. However, Sun saw the limitations of this approach and decided to implement the 100% buyback and burn method on September 3. According to Sun, this latter approach is straightforward and easier to verify.
Regarding the issue of revenue buyback and burning for @sunpumpmeme , the community previously suggested burning liquidity LP tokens because this approach is used by mainstream meme tokens like SHIB.
Burning LP tokens has several advantages, including increasing token liquidity…
— H.E. Justin Sun🌞孙宇晨(hiring) (@justinsuntron) September 3, 2024
SunPump has a total supply of 19.9 billion tokens, with 9.8 billion in circulation. At a $278 million market cap, buyback and burns can quickly propel the asset to a $1 billion market cap and beyond.
SUN broke its all-time high market cap on August 25 after surging due to the short meme season on the Tron network. The last time SUN hit this market cap, it only had a 21,000,000 total supply, and the SUN price topped $50.
The buyback and burn are directly proportional to the fees generated by the SunPump platform. According to Dune Analytics, SunPump’s revenue from token launches dropped to its lowest since August 16. On September 3, the platform only generated 195,671 TRX ($29,743) in revenue.
However, at the height of its popularity, the platform generated over $555,000 in revenue in a single day, showing the potential for the buyback and burns to grow as the platform expands.
Technical Analysis Hints Bullish Rebound
Although the longer-term trend remains bullish, SUN is in a short-term sideways consolidation, with price oscillating between the 50% Fibonacci retracement (Fib) level at $0.028 and the 61.8% level at $0.026.
SUN price is likely to find resistance around the 23.6% Fib at $0.033, with a break above this indicating a potential continuation of the uptrend with up to a 90% increase. Conversely, the 61.8% Fib at $0.026 provides strong support. A further decline towards the 78.6% Fib at $0.022 is likely if this level is breached.
The price is currently hovering around the 50% retracement level, often seen as a critical point where the market decides on the next move. The confluence of the 61.8% retracement level with the lower boundary of the recent range makes it a key support area.
SunPump price action also sports what could be a double top forming. It is crucial that the price maintains above the 61.8% Fib level. Otherwise, the asset may wipe out all its gains in the last month.
Overall, price volatility could soon follow with the developments in SunPump’s fundamentals. Since the 100% buyback and burn news release, SUN price has remained largely lull as investors scan the sentiment across the crypto space.
Frequently Asked Questions (FAQs)
The SunPump Buyback & Burn Plan is a strategic initiative announced by Justin Sun, which involves the 100% on-chain buyback and burning of SUN tokens. This approach is designed to reduce the token supply, increase demand, and consequently drive up the price of SUN.
Since the announcement of the buyback and burn plan, the SUN price has been in a period of consolidation. The market is currently waiting for signs of increased platform revenue and broader crypto market sentiment to push the price higher.
Investors should watch platform revenue, key Fib levels, and market sentiment. A break above $0.033 signals a bullish run, while falling below $0.026 suggests possible consolidation or decline.
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Evans Karanja
Evans Karanja is a content writer and scriptwriter with a focus on crypto, blockchain, and video gaming. He has worked with various startups in the past, helping them create engaging and high-quality content that captures the essence of their brand. Evans is also an avid crypto trader and investor, and he believes that blockchain will revolutionize many industries in the years to come. When he is not writing, you can find him playing video games or chasing waterfalls.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Source: https://coingape.com/markets/heres-why-sun-price-could-explode-300-after-sunpump-buyback-burn-plan/
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