Pump Surges 20.26%, As Buyers Make a Comeback. Is $0.0045 Next for Pump?

Key Highlights

• Pump Fun soars 20% in 24 hours, breaking out of the prolonged downtrend.

• Pump Fun buyers are making with netflow hitting -$6.73 million.

After experiencing massive losses since its launch, Pump Fun [PUMP] is waking up again. Over the last 7 days, the altcoin has made significant gains, rising by 21% from $0.0024 to a two-week high of $0.003778.

On daily charts, Pump is 20.3% trading at $0.003636 as of this writing. Why is the Pump price rallying?

Pump buyers return to the market.

When Pump was launched, most earlier buyers decided to dump or exit their positions, while others turned to profit realization. As prices declined further, most of these holders panicked and sold even more tokens. With this selling pressure from whales and retailers, Pump dipped to an all-time low, crashing 60% as reported by EMCryptohub, and hence the downtrend.

Now, the trend, sentiment, and market behavior among these players have shifted drastically, and they have started to accumulate Pump once again. According to Coinglass data, Pump Netflow has declined significantly, entering negative territory for three consecutive days.

Source: Coinglass

Currently, the altcoin's Netflow sits around -$6.73 million. When we examine exchange activities over three days and observe netflow values, it indicates that the asset is experiencing more outflows than inflows. A higher outflow compared to inflow suggests a higher accumulation rate with buyers dominating the market.

Most of the traders are also bullish.

Another vital market aspect pushing prices towards recovery is bullish sentiment exhibited by Pump in the futures market. When we look at the futures market, we can see the market has turned massively bullish with the Long Short Ratio rising to 1.089. When this metric is above 1, it means that most of the traders in the futures market are bullish and currently eye more gains.

Source: Coinglass

This is true because the data shows that long position contracts account for 51% of the futures contracts, while 48% are shorts. This scenario here suggests that investors are overly bullish and expect prices to rise even more. If the market goes their way, then we could expect higher prices for Pump.

Will Trend Reversal hold?

When buyers returned to the market, prices recovered significantly, breaking out of the downtrend. This followed RSI rising from oversold territory to 37, although it remains in bear territory.

Source: Tradingview

For the trend reversal to hold and boost Pump towards more gains, bulls must push RSI into bullish territory at least 55. With RSI currently near oversold territory, it indicates that selling pressure remains strong in the market. If bulls do so, we will see the altcoin reclaim $0.0045. Until they reclaim this zone, the uptrend is likely to reverse. A failure of the uptrend could result in a price crash to $0.0027.