What To Know
- PUMP rallies 90% in two weeks but faces strong resistance at $0.0049.
- TD Sequential flashes sell, signaling possible profit-taking and short-term correction.
- Rising long/short ratio shows sustained bullish sentiment despite correction risks.
Pump.fun (PUMP) has been on a gala ride for several days now, which allowed the token to increase its value substantially. Though at first glance irt looks optimistic, latest data suggests that a trend reversal may be around the corner. Ergo, let’s trace PUMP’s past performance and its current state to better understand what to expect from it in the coming days.
Is a Trend Reversal Inevitable?
Ali Martinez, a popular crypto analyst recently posted a tweet on X revealing an interesting development. As per the tweet, PUMP, the native token of Pump.fun, has surged nearly 90% in just two weeks, reflecting strong market enthusiasm and speculative inflows. However, such parabolic moves often raise red flags about sustainability.
The TD Sequential indicator—a tool designed to spot trend exhaustion—has now flashed a sell signal, suggesting that bullish momentum may be overextended, and a correction could be on the horizon.
Though this does not mean there is a chance for an immediate dip, it does indicate that traders might begin to take profits here, securing recent gains. Hence, risk management becomes of utmost importance. Investors can consider managing risk by either scaling out of their positions or by going ahead and taking partial profits or setting stop-loss levels in case a sharp reversal occurs.
At the time of writing, PUMP trades at $0.004935 with a market capitalization of slightly above $361 million, making it the 55th largest crypto.
What to Expect Now?
Since the likelihood of profit-taking appeared high following PUMP’s recent explosive rally, CryptoMoonPress conducted a deeper technical analysis to identify potential support zones where the token may find stability in the event of a decline.
On Pump.fun’s 4-hour chart, the token witnessed a strong rejection at the $0.0049 resistance level lately, indicating that bullish momentum may be losing steam. This rejection is very significant for technical analysis, since such a level often signals a little time when buyers begin to lose control and sellers begin to set downward pressure.
If selling intensifies, the first level traders should watch closely is $0.0040, which represents the nearest support zone. This price point could serve as the initial safety net where short-term traders attempt to re-enter the market, potentially slowing the pace of decline. However, a decisive break below $0.0040 may lead to a more extended correction.
In such a scenario, the next major support zones lie around $0.0032 and $0.002, both of which could act as pivotal turning points for PUMP. A bounce from these levels would indicate strong buying interest, whereas a failure to hold could expose the token to even deeper losses.
However, a critical metric remained in Pump.fun’s favor. As per our analysis of Coinglass’ data, PUMP’s long/short ratio registered a sharp uptick in the last 4-hour timeframe. In crypto, a rising long-short ratio means the number of traders with long (bullish) positions is increasing relative to short (bearish) positions, indicating a stronger positive market sentiment and increased confidence in a price increase.
To Sum Things Up
To conclude, the 90%-plus run of PUMP signals a strong market enthusiasm and growing investor interest, yet some alarms go forth in warning. The TD Sequential sell indicator coupled with resistance at $0.0049 bears the wrenching apparition of short-term corrections from profit-taking. Support at $0.0040, $0.0032, and $0.002 will act as the keys in deciding PUMP’s subsequent movement.
However, with a rising long/short ratio, one can understand that bulls are not ready to quit yet. Ultimately, PUMP finds itself at a crossroads where investors need to stay alert, risk-management-oriented, and keep an eye on technical and sentiment changes to safely ride through the volatility ahead.
Read more: PENGU In a Healthy Correction! Is $0.10 the Next Stop?
