Jupiter: Can a 5M buyback push JUP back to $1.40?

• Jupiter Exchange buybacks have begun, with nearly 5 million JUP being bought back from protocol fees.
• The buybacks are happening at a support level of $0.70 and the price could trade back to its December 2024 high of $1.40.

In the past 24 hours, Jupiter [JUP] surged ahead of Pump.fun in revenue generation, with Jupiter logging $2.73 million compared to Pump.fun’s $2.42 million.

This shift indicated a change in platform preference among users, possibly driven by distinct features or user incentives on Jupiter.

Jupiter Exchange used protocol fees to buy back nearly five million JUP tokens in just 20 hours during the ongoing market dip. This significant buyback, derived from protocol fees, is a bold bet on the token’s future amidst a challenging market environment.

The recent spike in buybacks could hint at a bullish scenario for JUP. It might reduce the circulating supply, potentially driving up the token’s price if demand remains steady or increases.

Source: Flipside

If the broader market continues to struggle, the increased buyback might not uplift the token’s value substantially. Investors should watch the exchange’s next moves carefully.

If Jupiter continues to buy back JUP aggressively, it might reinforce confidence in the token and attract more investors. However, if Jupiter fails to sustain this buyback momentum, the token price could falter, especially if the market dip deepens.

This strategic play by Jupiter might set a precedent for how exchanges can leverage buybacks to manage token economics proactively.

How will JUP’s price action react?

Looking at JUP’s price action, the executed buybacks at the crucial support level of $0.70 amidst the wider market’s downturn cement the significance of this zone.

This strategic maneuver is not just a bet on JUP’s immediate recovery but also sets the stage for a potential rebound to its December 2024 highs of around $1.40.

The JUP/USDT pair, after tumbling from those peaks, found a steady base at $0.70, as indicated by the recent stabilization. The buybacks could contract the circulating supply, creating upward pressure on prices if the market sentiment shifts positively.

Source: TradingView

If market sentiment improves, JUP could revisit and possibly breach the $1.40 mark, energized by reduced supply and renewed investor interest.

Conversely, if the broader crypto market continues to falter, even aggressive buybacks may struggle to lift JUP beyond short-term rallies, risking a retest of lower supports around $0.60 and below.

This scenario stresses the dual-edged nature of buybacks amidst volatile markets. It highlights the critical balance between investment strategy and market conditions.