Against the backdrop of an overall weak memecoin market, PUMP, which once soared due to short-term hype, recently encountered a 'black swan' — due to the concentrated sell-off from two whale addresses, the token price plummeted over 20% from its historical high of $0.0089 to a low of $0.0068, and is currently battling around the key support level of $0.0067. Although PUMP's monthly increase still maintains an impressive 135%, this whale sell-off has not only triggered short-term market panic but also made investors start to pay attention to the core issue of 'how memecoins can resist speculative selling pressure through buyback mechanisms'.
1. Details of whale selling: 738.98 million tokens dumped, $5.22 million of selling pressure triggered a chain reaction.
The direct trigger for PUMP's price pullback was the concentrated reduction of holdings by two early whale addresses. According to blockchain explorer data, these two addresses completed their sell-offs during two time periods on September 21, 10:00-11:30 and 14:00-15:15, and the specific details exposed the typical risks of 'large players controlling the memecoin market'.
1. The scale of selling and price impact.
The first whale address (tagged 'Early Holder 01') sold a total of 412.63 million PUMP at an average price of approximately $0.0072, with a cashing amount of $2.97 million; the second address (tagged 'Early Holder 02') sold 326.35 million PUMP at an average price of approximately $0.0070, cashing out $2.25 million. The two addresses together sold 738.98 million tokens, accounting for 8.12% of the current circulating total of PUMP, with a total cashing amount of $5.22 million.
Large-scale selling pressure directly triggered a chain reaction in the market: during the first address's selling period, the price of PUMP quickly dropped from $0.0078 to $0.0070, with a decline of 10.2% within 1.5 hours; when the second address followed up with selling, market panic intensified, and some retail investors followed suit, further pushing the price down to $0.0068, a drop of 20% compared to the opening price of $0.0085 that day, with the daily turnover rate surging to 35%, far exceeding the average turnover rate of 18% over the past 7 days.
2. Background of whale holdings and selling motives.
In terms of holding time, both addresses are early participants of PUMP: 'Early Holder 01' obtained the tokens through 'liquidity mining' at the beginning of PUMP's launch in June 2025, with a holding cost of only $0.0021, achieving nearly 3.4 times the return in this sell-off; 'Early Holder 02' held with a cost of $0.0025 through the 'private placement round', with returns reaching 2.8 times. Coupled with the overall cooling of the current memecoin market (the memecoin sector index has dropped 12% in the past two weeks), the whales' motivation to 'cash out at high levels' is evident — especially after PUMP reached the historical high of $0.0089, the buying power in the market began to weaken, and reducing positions at this time can both maximize gains and avoid potential risks of subsequent corrections.
What's more noteworthy is that both addresses chose to 'dump large amounts' rather than 'small dispersed sales' before the sell-off, and this operational mode has a particularly significant impact on memecoins, which typically have 'relatively limited liquidity'. Data shows that PUMP's 24-hour liquidity pool scale on mainstream exchanges is about $12 million, and the selling pressure of $5.22 million accounts for over 43%, causing some trading pairs to experience 'surge in slippage' — during the peak selling period, $1,000 sell orders saw slippage of 5.8%, far exceeding the normal level of 1%-2%, further amplifying the price drop.
2. Support level contention: $0.0067 becomes the 'line of life and death', can the 135% monthly increase withstand the pullback?
Despite facing a significant pullback, PUMP is not without support. From a technical and market sentiment perspective, $0.0067 is not only the key support level currently contended but also reflects the balance of 'short-term speculation' and 'mid-term heat' in the memecoin market.
1. The multiple support logic at $0.0067.
From a price perspective, $0.0067 corresponds to three major supports: First, the 'lower edge of the fluctuation range in the last two weeks', PUMP found buying support at this price level three times between September 10 and September 20, forming a 'triple bottom' structure; second, the '50-day moving average position', currently the 50-day moving average for PUMP is exactly at $0.0066, which overlaps significantly with the $0.0067 support level. Technical investors usually view this position as a 'mid-term trend watershed', and a break below it may trigger more stop-loss orders; third, the 'monthly price increase retracement level', the price of PUMP on August 21 was $0.0029, and as of September 21, after the retracement, the monthly increase still reached 135%. $0.0067 corresponds to the key position of '60% monthly price increase retracement', which has certain attractiveness for previous profit holders.
From a funding perspective, when the price dropped to $0.0068, the market began to show signs of 'bottom-fishing funds' entering: in the last 24 hours, the buying volume in the $0.0067-$0.0069 range reached $3.8 million, 72.7% higher than the buying volume above $0.0075 ($2.2 million), where 'medium-sized buys of $10,000 - $50,000' accounted for 55%, indicating that some investors believe the current price has entered a 'reasonable valuation range'.
2. Comparison with other memecoins: the pullback is still within controllable limits.
In a horizontal comparison of the current memecoin market, PUMP's 20% pullback is still within a 'controllable range'. For instance, during the same period, PEPE dropped 15% due to 'community governance proposals not passing', DOGE fell 12% because 'Musk's tweet did not mention relevant cooperation', and some small-cap memecoins (such as the recently popular HFUN) experienced retracements exceeding 30%. This is partly thanks to PUMP's 'buffer from the 135% monthly increase', and also related to Pump.fun's 'buyback support' mechanism — during this sell-off, Pump.fun officially initiated an 'emergency buyback', buying back $1.2 million worth of PUMP that day, which somewhat alleviated the selling pressure.
3. The 'supporting role' of the buyback plan: a $97.4 million buyback covering 7.051% of the supply, can it reverse market confidence?
Faced with whale sell-offs and a weak memecoin sector, the buyback plan initiated by Pump.fun in July has become an 'important safety net' for PUMP. As of September 21, this plan has cumulatively repurchased $97.4 million of PUMP, accounting for 7.051% of the total supply. Its operational model and effects provide a reference case for the memecoin market on 'how to resist risks through mechanism design'.
1. The core design of the buyback mechanism.
Pump.fun's buyback plan is not a 'non-discriminatory buyback', but rather adopts a 'dynamic trigger + targeted destruction' model: first, 'price-triggered buyback', when the price of PUMP drops more than 10% in a single day or falls below key support levels (such as $0.0067), the platform will extract funds from the 'trading fee reserve' for repurchase; the $1.2 million emergency buyback during this sell-off belongs to this type; second, 'periodic and quantitative buyback', the platform takes 30% of the month's trading fees each month on the 15th for buybacks, having completed buybacks of $28 million, $32.4 million, and $37 million from July to September, with the buyback scale increasing month by month.
The repurchased tokens are not meant for 'platform holdings', but are directly sent to a 'burn address' for destruction — as of now, 642 million PUMP have been destroyed, accounting for 7.051% of the total supply. This operation not only reduces the circulating supply but also sends a signal to the market that 'the platform is optimistic about the token's value in the long term'. Data shows that after each buyback and destruction announcement, PUMP's price typically sees a short-term rebound of 3%-5%, indicating a positive market expectation for the buyback mechanism.
2. Limitations of buybacks: difficult to completely offset speculative selling pressure.
Although the buyback plan plays a certain supporting role, it still cannot completely solve the core contradiction of the memecoin market — 'speculative attributes dominate, lacking actual value support'. The issues exposed by this whale sell-off are particularly evident: the $5.22 million selling pressure far exceeds the platform's daily emergency buyback scale of $1.2 million, leading to limited support for prices from buybacks; at the same time, memecoin investors are mainly 'short-term speculators', with nearly 70% of PUMP holders having holding periods of less than 15 days. This type of investor is less sensitive to the long-term logic of 'buybacks', focusing more on 'short-term price fluctuations', and is prone to follow the crowd and exit when selling pressure appears.
Moreover, the sustainability of the buyback funds is also in question: Pump.fun's buyback funds mainly come from 'trading fees'; if the trading activity of PUMP declines in the future (such as user loss due to this sell-off), the commission income would decrease, and the scale of buybacks may be forced to shrink, thus affecting market confidence.
4. Insights for investors: memecoin investment needs to balance 'heat' and 'risk control'.
The recent volatility of the PUMP token provides three key insights for memecoin investors:
1. Beware of the 'whale control risk', prioritize choosing coins with 'decentralized holdings'.
Before participating in memecoin investments, one should check the 'holding distribution' through a blockchain explorer: if the top 10 addresses hold more than 50%, it indicates 'high control', posing a similar risk of whale selling as seen with PUMP; conversely, if the top 10 addresses hold less than 20%, and the number of retail addresses continues to grow, it indicates a more decentralized nature, with relatively stable price fluctuations. For example, PEPE has only 18% of its holdings in the top 10 addresses, and there hasn't been a 'single selling of over 5% of the circulating volume' in the past six months, showing much better price stability than PUMP.
2. Focus on the 'actual implementation of the buyback/destroy mechanism', rather than just 'verbal commitments'.
Currently, most memecoins promote a 'buyback plan', but the actual implementation varies greatly. Investors should focus on three points: first, whether the 'sources of buyback funds are clear' (for example, Pump.fun clearly states it is 'trading fees', rather than 'platform's own funds', which is more sustainable); second, whether the 'buyback is transparent and traceable' (whether the buyback address and destruction records are publicly available on the blockchain); third, the 'matching degree of buyback scale and circulating supply' (for example, a buyback of $97.4 million for PUMP covers 7.051% of the supply, which has a much greater impact on the market than a project saying it will 'buy back 1% of the circulating supply').
3. Control positions to avoid 'chasing high and standing by'.
Memecoins' 'high volatility' often comes with 'high risk'; despite PUMP's monthly increase of 135%, this pullback has left late investors (such as those entering above $0.0085) with paper losses exceeding 20%. It is recommended that investors participate in memecoins with a position not exceeding 3% of total assets and set strict stop-loss measures (for example, immediately exit if it falls below a key support level of 10%), to avoid the impact of a single coin's volatility on the overall investment portfolio.
Whether PUMP can hold the $0.0067 support level depends not only on the subsequent buyback efforts from Pump.fun but also on the overall sentiment in the memecoin sector. If the sector index warms up and the platform increases the scale of buybacks, PUMP may rebound to $0.0075; if the support level is breached, the next key support will look towards $0.0060 (corresponding to a 107% monthly increase).
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