Fibonacci levels for correction and the long-term support level at $0.0025 may be re-tested.
The meme coin launch platform Pump.fun [PUMP] is facing many legal issues. A federal court has approved the expansion of a class-action lawsuit against Solana Foundation, Gito Labs, Pump.fun, and the executives associated with them.
This occurred after a whistleblower revealed 5000 internal chat messages shedding light on accusations of insider trading and market manipulation.
The team is accused of creating a platform that allowed 98.6% of the 14 million meme coins launched on it to collapse to zero. It is estimated that this caused losses for retail investors ranging between $4 billion and $5.5 billion.
### Investigating the latest price movements of PUMP
Since December 9, the PUMP token has lost 39.3%, from $0.0032 to $0.00196. The latest wave of losses resulted in the loss of a long-term support level at $0.0025.
This demand zone has been tested three times since July and defended each time. The strength of the bearish trend over the past two months has finally prevailed.
The cumulative money flow index (CMF) on the daily time frame has been below -0.05 for most of the past six weeks, indicating seller dominance. The money flow index (MFI) reading at 40 also indicated selling pressure and bearish momentum.
A series of Fibonacci retracement levels have been drawn based on the latest downward movement. They indicated that a retracement to $0.0025 and $0.0026 is possible, as they are the 61.8% and 78.6% retracement levels.
### What is PUMP likely to do next?
The current price structure on the daily and hourly time frames has been bearish.
Coinalyze data showed a 4% increase in open interest over 24 hours, despite PUMP prices dropping by 1.57% in 24 hours.
The highlighted liquidation map points to $0.00193 and $0.00207 as high concentration short-term levels for leverage. This leverage accumulation may attract PUMP's price towards either level before a potential reversal.
### Advice for traders - maintain a bearish bias but...
A push towards $0.00207-$0.0021 is likely to lead to further declines.
As Fibonacci levels revealed, traders should be cautious of a retracement reaching $0.0026. The area between $0.0023 and $0.0025 is also likely to reverse any price retracement of PUMP with high probability.
Traders can look for short selling opportunities upon retesting the mentioned resistance levels, with tight stop losses.
For example, a short sell entry at $0.00207 would be invalidated by a move above $0.0021, as it is the highest local level on the hourly time frame.
### Concluding thoughts
- Legal issues surrounding Pump.fun have heightened bearish sentiment around its native token.
- Supply zones at $0.00207 and $0.0023 are short-term resistances that may trigger the next downward move.
@Binance Square Official $PUMP
