⚡ Pump.fun (PUMP) faces a test of consecutive declines: Is a double bottom test coming, and can it rebound?
Recently, Pump.fun (PUMP) has been quite volatile📉. Over the past three days, PUMP has continued to decline, and as of the time of publication, the price has dropped to $0.00276, with a single-day drop of 6.5%. Interestingly, trading volume surged by 25% as the price fell, indicating that market attention on PUMP remains high👀.
📉 Reasons behind the price drop
This wave of decline is not an isolated event but is influenced by multiple factors:
1️⃣ Overall market pressure
In the past 24 hours, Bitcoin (#BTC ) has dropped 3.5%, while Ethereum (#ETH ) has fallen 4.25%. Altcoins have naturally been affected📊, and PUMP is no exception, with a total market cap decline of 3.07%.
2️⃣ Declining revenue
PUMP's revenue dropped from $2.59 million on August 13 to $1.41 million💸. This means that the funds available for repurchasing PUMP tokens have decreased, putting pressure on the price.
Source: DefiLlama
3️⃣ Market sentiment is low
Three consecutive days of decline, combined with market uncertainty, have led traders and investors to adopt a cautious mindset, further intensifying the bearish atmosphere⚠️.
💰 Implications of foreign exchange reserves
Despite the short-term bearish outlook, the 12.43% decline in PUMP's foreign exchange reserves remains a signal worth noting📉➡️💹.
Source: Nansen
Why is it important?
A decline in foreign exchange reserves often indicates that some large holders are increasing their token holdings, which may provide psychological support for long-term holders and lay the groundwork for future price rebounds💡.
📊 Technical analysis
Technically, AMBCrypto's analysis shows that PUMP is undergoing a critical double bottom test:
The daily chart shows that the price has been consolidating between $0.00273 and $0.0032 for six trading days.
The current price is near the neckline of the double bottom pattern, and slight fluctuations could trigger a new round of declines or rebounds.
If it breaks below $0.0027, PUMP could drop another 20%, targeting a price level of $0.0022⚡.
Conversely, if the four-hour candlestick closes above $0.0032, a rapid rebound may be triggered in the short term🔥.
This means that PUMP is at a critical watershed, and investors need to closely monitor price trends📈.
Source: TradingView
🤔 Future trend outlook
In summary, there are two potential outcomes for PUMP's future trends:
1️⃣ Continued bearish outlook
If market sentiment remains low, there may be significant downward pressure in the short term, and a break below key support could lead to further corrections. Continuous declines will test investors' patience but may also provide low-position opportunities for long-term layouts🛡️.
2️⃣ Rebound opportunity
If the price can hold the support at $0.0027 and break through the resistance at $0.0032, a rapid rebound may occur in the short term📈. Combined with the signs of increased holdings due to the decline in foreign exchange reserves, the long-term trend may still lean towards stability or bullishness💪.
Source: TradingView
⚡ Investment tips
Focus on support and resistance levels: $0.0027 support, $0.0032 resistance
Build positions in batches: Avoid chasing highs or cutting losses all at once, controlling positions is more stable🪙
Observe market sentiment: The trends of BTC/ETH may directly affect PUMP
Pay attention to foreign exchange reserves and trading volume: Signs of increased holdings may indicate future rebound potential
🐂 Summary
⚡ Three consecutive days of decline, with the price at $0.00276.
Trading volume has increased by 25%, showing high market attention🔥.
Declining revenue and overall market pressure have exacerbated the short-term bearish outlook.
The decline in foreign exchange reserves suggests that some large holders are increasing their holdings, which may support the long-term trend💹.
Technical analysis shows a critical double bottom test; breaking below $0.0027 could lead to a 20% further decline, while breaking above $0.0032 could lead to a rebound.
Overall, PUMP is like a ⚡ in the eye of the storm, experiencing significant short-term volatility, but its long-term potential remains worthy of attention. Investment should be cautious, and batching layouts is more prudent💡.
