After hitting a new low two days ago, Pump.fun (PUMP) has jumped nearly 30% to a key resistance level. As the token attempts to reclaim this area, an analyst suggested that the bottom may be in, and a recovery rally is underway.
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PUMP Sees Rollercoaster Price Action
On Thursday, Pump.fun retested a crucial level after its recent struggles. The token has been making the headlines for its constant bleeding, hitting new all-time lows (ATLs) over the past week.
Notably, PUMP launched on July 14 and surged 70% from its Initial Coin Offering (ICO) price of $0.0040, hitting its all-time high (ATH) of $0.0068 two days later. However, selling pressure from large-scale investors and disappointing updates about the highly anticipated token airdrop halted the fun.
Just a week after its launch, Pump.funโs token fell below its ICO price and continued to nosedive below the $0.0030 mark over the following days. The cryptocurrency hit an ATL of $0.0028 last Thursday after the platformโs co-founder, Alon Cohen, stated that the PUMP airdrop would not be taking place soon.
Since then, the token has dropped even further, hitting a new low of $0.0022 on July 29, nearly a 70% drop from the ATH. Nonetheless, PUMP has also been ranging between the $0.0024-$0.0029 area during the past week, attempting to break above this range three times.
Over the past two days, Pump.fun has surged nearly 30% from the lows, breaking above the $0.0030 resistance for the first time in a week. The token surged 12% on Thursday to hit a weekly high of $0.0032 before retracing toward the $0.0027-$0.0029 area.
Crypto analyst Altcoin Sherpa highlighted the recent price action, suggesting that PUMP has shown โsome great strong moves latelyโ and a breakout and โhated rallyโ could be coming soon.
He previously forecasted that the bottom would happen โrelatively soon,โ and it would likely be followed by โsome sort of giga crime pump.โ
Pump.Fun Buybacks To Fuel The Recovery?
The recent recovery appears to be partially driven by the platformโs buyback program and whalesโ renewed interest in the token. Notably, a large-scale investor that previously lost $125,000 on PUMP purchased $3.16 million worth of tokens on Thursday. Lookonchain shared that a whale spent 17,542 SOL to buy $1.06B of $PUMP at $0.00297.
Meanwhile, a community member noted that โPumpFun has pivoted to what seems to be 100% token buybacks. 98% of yesterdayโs PumpFun / PumpSwap revenue went to buying PUMP today.โ
Similarly, On-chain sleuth EmberCNB detailed that Pump.fun transferred 12,000 SOL, around $2.16 million, to its buyback address on July 30. Itโs worth noting that the memecoin launchpad started a repurchase initiative on July 16, when the token hit its ATH.
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According to the report, Pump.fun initially transferred 187,770 SOL, approximately $30.53 million, from its fee wallet to the buyback address. Since then, the platform has repurchased 3.828 billion PUMP tokens for 129,100 SOL, valued at $21.5 million.
Nonetheless, an X user expressed concerns about the initiative, affirming that โit is erratic.โ To the community member, the inconsistent buybacks are โnot a good look (โฆ) first day 10m (way above their revenue), then stop, then 1m, then stop, now 100%, they are just playing to see what gets the attention, then stop buybacks altogether.โ
As of this writing, PUMP is trading at $0.0027, a 7% decline in the weekly timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com
