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PUMP.Fun Price Analysis – Why PUMP Could Soon Hit $0.01 Despite Tokenomics Concerns

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Highlights:

  • PUMP drops as early investors lock in profits
  • Concerns of wallet concentration and an aggressive unlock adding to selloff
  • PUMP could rally to $0.01 once a clear price floor is established

Pump.Fun (PUMP) is one of the top trending cryptocurrencies today, and for a good reason. PUMP recently went public after a highly successful presale, and investors and it’s currently among the top trending cryptocurrencies on multiple social media platforms. However, despite the hype, PUMP is currently dumping. When going to press, PUMP.Fun was trading at $0.0055, down by 18% in the day.

Pump.Fun Trading Volumes Surge Indicator to Ongoing Selloff

Even as the price dumps, PUMP trading volumes have surged parabolically intraday. PUMP’s daily trading volumes are up 25739% to $1.45 billion. Such a surge in volumes when the price is going down could mean that those who bought in the presale, and are in profit, are selling their tokens to lock in profits. The selloff could also be driven by investor fears around the future price action of PUMP.

PUMP Tokens Are Too Concentrated In A Few Hands

One of the concerns likely driving the selloff is that the PUMP tokens are concentrated in a few hands, and they have an incentive to sell. 20% of all the PUMP tokens are reserved for the core team. This creates fears that it could add a lot of pressure to the price if they choose to sell. There are also concerns that insiders control another 10% of the total supply outside the core team. Then there is the fact that the PUMP token unlocks are too aggressive and could add pressure to the price before things stabilize.

For context, 33% of all PUMP tokens were unlocked on launch. This is a significant number and has flooded the market with tokens, adding to the sellside pressure on a day that the broader market is in a slight correction. The fact that PUMP has no utility and is only for promotional purposes also drives bearish sentiment in the short term. Despite the negative price pressure that PUMP faces, it could do well in the future.

PUMP Ease of Access Could Trigger Bullish Reversal

One of the factors that could help drive demand is ease of access. Unlike most new tokens that are usually restricted to a few obscure exchanges, PUMP has been listed on multiple top exchanges. The token is now available on cryptocurrency trading platforms such as Gate, Kucoin, and Crypto.com. Many other top exchanges are also in the process of listing it. Such listings give PUMP an element of credibility in the eyes of investors. This could trigger a wave of speculative buying, especially once Bitcoin comes out of the intraday correction and rallies above $120k.

PUMP Has The Advantage of Market Visibility

Pump.Fun also has a big name behind it. PUMP is the token of the world-leading meme coin launch platform, PUMP.Fun. As such, even though it lacks utility, investors could take it up strongly compared to random meme coins. This visibility in the market and the impression that PUMP is undervalued after the ongoing correction could see the price rally to new highs in the short to medium term. 

Technical Analysis – Pump.Fun Price Consolidating After Launch Hype

Following a brief rally after launch and the subsequent selloff, PUMP is consolidating. PUMP is currently oscillating between the $0.0060 resistance and $0.0052 support.

PUMP.Fun Price Analysis
Source: TradingView 

If bulls regain control and push PUMP through the $0.0060 resistance, a rally to $0.01 could follow in the short term. However, if the selloff resumes and bears breach the $0.0052 support, then PUMP could be headed to the day’s low of $0.0046 in the short term.

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