PUMP Defies Sell-Off: Token Rallies 11% Despite $2.1M Dump
PUMP's Price Surge: Key Factors
Pump.fun's native token, PUMP, experienced an 11.3% surge, reaching a local high of $0.00306 after successfully defending the $0.0026 support level. At the time of writing, PUMP was trading at $0.0029, up 8.3% on the day.
The altcoin's market capitalization briefly dipped to $975 million before climbing back above $1 billion, indicating renewed capital inflow.
Futures Market Fuels PUMP Recovery
A significant driver behind PUMP's recovery appears to be the derivatives market. As the token's price declined, investor interest in futures contracts increased dramatically.
According to Coinalyze, PUMP's funding rates surged to 0.021, considered a high level. Predicted funding rates across exchanges averaged near +0.01%, signaling strong demand for long positions.
Source: Coinalyze
The Long/Short Ratio for PUMP sat at 2.48, with long positions accounting for 71% of total Futures contracts, reflecting bullish sentiment among traders.
Source: Coinalyze
Profit-Taking Dampens Momentum
Despite the bullish signals from the futures market, profit-taking activity remains high. Sellers dumped 744.9 million tokens, compared to buyers who took 533 million, resulting in a negative Buy/Sell Delta of -211 million tokens.
Source: Coinalyze
PUMP's Spot Netflow turned positive, reaching $165.9k, indicating a higher inflow compared to outflow.
Source: CoinGlass
PUMP's Price Outlook
PUMP bounced off its low as traders piled into futures, flipping the short-term Moving Average (9DMA) at $0.0029. The Stochastic RSI also signaled a bullish crossover.
Source: TradingView
Currently, PUMP is testing its 21-day Moving Average near $0.0032. Bulls need to hold above $0.003 and flip the 21DMA to potentially reach $0.0038. Failure to do so could lead to another retest of the $0.0026 support level.