Key Highlights
- PUMP token surged over 14% in 24 hours, pushing its market cap to around $1 billion as trading volume jumped more than 71%.
- Pump.fun’s buyback and burn program and over $2.13 million in short liquidations helped drive the strong price rally.
- PUMP has broken above key resistance levels, with traders watching for a breakout that could extend the rally toward higher price targets.
Pump.fun’s native token, PUMP, rose more than 14% over the past 24 hours, extending a rally that has lifted the token more than 35% over the past week. At the time of writing, PUMP was trading at $0.00255, after rebounding from an intraday low of $0.00224.
The token initially reached a daily high of about $0.00256 before retracing a bit. Its market capitalization climbed to $1 billion in value, while 24-hour trading volume surged almost 71.64% to about $172 million.
The latest move marks a sharp recovery after the token traded at lower levels for several months.
Why is Pump.fun surging today
One factor behind the rally is Pump.fun’s buyback and burn program. The platform uses 50% of its protocol revenue to buy PUMP tokens from the market before removing them from circulation. This creates regular buying demand, especially when the platform generates more fees.
As of August 5, Pump.fun showed annualized revenue of about $356 million, according to data from Tokenomist. At that level, nearly $488,000 could be used for daily token buybacks if revenue remains steady.
Short sellers add fuel to the rally
Another catalyst has been a wave of short liquidations. According to data from Coinglass, about $2.35 million was liquidated from the market within the last 24 hours.
Of that amount, about $2.13 million came from short positions, compared with less than $200,000 in long liquidations.
When traders holding short positions are liquidated, they are forced to buy back the asset to close their positions, adding further buying pressure and potentially accelerating price gains.
PUMP breaks above bullish flag pattern
PUMP recently broke above a descending trendline that had held the price down for months. It also moved above the resistance area between $0.0022 and $0.0024, turning that zone into a possible support level.
The token is now trading above its major moving averages, a setup that technical traders often view as a sign of stronger buying momentum. On lower timeframes, PUMP is testing the top of an ascending channel, with traders closely observing whether it can keep moving higher.
Crypto trader Daan Crypto Trades said in an X post that PUMP had shown “lots of relative strength” after its breakout. He added, “Beautiful move after the breakout. Moving fast after underperforming for a while ahead of that big July unlock.” He also said buyers need to hold above the previous resistance area to keep the rally going.
Can PUMP break next resistance?
PUMP is currently at its next major challenge, which is the daily resistance level currently sitting in the $0.002459 to $0.002542 range. Current price action shows that the level is rejecting the token, but this is normal as sellers are expecting to be at the level.
But for the price to continue its current rally, a strong candle break above the level is needed. If that happens, it could propel the price up to where the next resistance level is at $0.004845. That is about an 85% surge from the current level.
Failure to break above the resistance zone could see PUMP retest support around $0.00157. , which is where the initial rally started from. Moreover, the Relative Strength Index (RSI) is at 72.87, which suggests that the price is approaching an overbought level but still has little room to push to the upside.
Also Read: Crypto Price Signals: Ethereum Volume Drops 76% as XRP Enters Quiet Phase
