PUMP Token Gains 10% Amid Buyback Plan and Rising Trading Volume

Pump.fun has allocated 54% of its protocol revenues to its continuous PUMP buyback and burn plan. This plan has helped it remove about $3.55 million worth of PUMP tokens from the open market, making it a deflationary factor for the asset.

Drawing lessons from past experiences where there was a similar situation, the reduction in the supply had an impact on the price performance. The same turn of events could be in store for PUMP, especially with the increase in its demand recently.

Given that the PUMP token has now become more actively traded, there are efforts in the market to see if the buyback process can help boost its price action. However, despite the ongoing burns, PUMP remains about 50% below its all-time high. This, despite the price gaining by 10% in the last 24 hours on the back of the trading volume doubling and alluding to greater market participation.

That gap is evidence that the deflationary mechanism is yet to fully overcome the selling pressure that pushed the token away from its peak.

PUMP’s latest price move has been backed by a sharp increase in market activity. The altcoin gained by 10% over 24 hours, while its trading volume almost doubled to $412.78 million during the same period. Of the total number of open trades in the market, long positions accounted for 58% of the total exposure, showcasing the magnitude of the bullish bias.

In most cases, the combination of rising prices and expanding volume usually provide a stronger foundation for a recovery since the move reflects greater participation rather than a thin liquidity spike.

The same could come into play in PUMP’s case.

The $0.0055-level has rejected PUMP twice, making it the most important barrier in the recovery process. Pump.fun’s buyers now need to absorb the selling pressure around this zone to confirm that the recent rally is more than a short-term bounce.

A decisive break above $0.0055, particularly if accompanied by another expansion in volume, could strengthen the bullish structure and open the door to higher levels. It would also mark an important shift after two failed attempts to clear the resistance. Given the fact that PUMP is still trading above all key EMAs, a rally continuation is more likely to occur.

Failure to break the level would tell a different story though. PUMP could retreat towards its EMA support as short-term buyers take profits and the market waits for another spark.

• PUMP’s price jumped by 10% as trading volume doubled and the token held above its key EMAs.
• Pump.fun has committed 54% of protocol revenue to buybacks, with $3.55M worth of PUMP already removed from circulation.