Despite Jupiter's recent implementation of a buyback mechanism, the performance of JUP remains under pressure. While Jupiter Exchange has announced measures to reduce the token supply, market sentiment has yet to signal significant growth.
Jupiter Exchange’s Buyback Plans
Jupiter Exchange recently revealed its strategy to use 50% of transaction fees generated to repurchase JUP tokens from the market. This initiative aims to lower the circulating supply and create upward price pressure by limiting token availability.
Projections estimate that $600 million will be spent on this buyback throughout the year, equivalent to 25% of JUP’s market capitalization, which currently stands at $2.4 billion. Despite the promising fundamentals, market participants haven’t responded positively, leading to decreased activity within the ecosystem.
Declining Market Activity Puts Pressure on JUP
Despite optimistic developments, data suggests weakening activity across the JUP ecosystem:
Transaction Decline: Daily JUP transactions peaked at 83,500 on January 23 but have since fallen to 22,800.
Active Addresses Decrease: The number of daily active addresses dropped from 855,800 to 801,800, reflecting a decline of 54,000.
This downward trend indicates waning user interest, exerting further pressure on JUP's price.
Technical Analysis: Key Support and Resistance Levels
On the price chart, JUP trades within a symmetrical channel, defined by converging support and resistance levels.
Resistance Challenges: A recent rejection at the resistance level signals a potential further drop.
Support at $0.7904: If the price falls below this critical support level, it could decline further toward the main support of the symmetrical channel.
If JUP rebounds from the support zone, it may attempt to break above the resistance level. A successful breakout could push the token toward $1.44, marking the peak of the channel.
Future Scenarios: Where Will JUP’s Price Go?
Current developments suggest JUP is at risk of a further decline. If bulls fail to hold the $1 level, the token may lose its recently regained position.
While Jupiter Exchange has introduced innovative mechanisms, declining activity and weak market sentiment could drive JUP below its current trading range. The token’s future trajectory will depend on whether bulls can reverse the downward trend.
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