Pump.fun has experienced a sharp price drop, causing PUMP to fall to a 5-month low. This decline shows ongoing capital outflow among holders, who see little value in the token in the short term.
The weakness in the broader market has worsened the situation, with Bitcoin's instability putting additional pressure on the already fragile sentiment.
Pump.fun holders are switching to selling
On-chain metrics indicate a clear loss of confidence among PUMP holders. The Chaikin Money Flow is well below zero, confirming aggressive capital withdrawals. This condition indicates that investors are exiting their positions rather than stepping in for a potential recovery.
The CMF has now reached an all-time low, marking the largest outflow in PUMP's trading history. Such extreme values usually indicate strong bearishness. Due to ongoing selling, liquidity support is diminishing, making a swift recovery difficult and keeping the downside risk high.
Receive more token insights like this? Sign up for the daily crypto newsletter from editor-in-chief Harsh Notariya here.
The macro picture for PUMP remains strongly linked to the performance of Bitcoin. The correlation with Bitcoin has recently rebounded to 0.78 after a brief decline. This means that PUMP is once again closely following Bitcoin's price movements.
This relationship is problematic because Bitcoin is currently uncertain around the $86,000 level. Weakness in the broader market often results in larger losses for smaller tokens like PUMP. So if Bitcoin drops further, PUMP is likely to follow, increasing the losses for remaining holders.
At the time of writing, PUMP is trading around $0.002031, the lowest point in 5 months. The token has dropped by more than 33.8% in one week. These increasing losses indicate a deteriorating sentiment and a clear lack of sustained buying interest.
If holders continue to exit, this could push PUMP towards the $0.001917 support level. This level is crucial for short-term stability. If the price drops below this, the path is clear towards $0.001711, which confirms the bearish pattern and increases the downward volatility.
A possible recovery depends on improving market conditions and fresh capital inflow. Regaining $0.002123 as a support level would be the first sign of stabilization. Moreover, if buying interest returns, PUMP could rise towards $0.002428, invalidating the bearish expectation and restoring short-term confidence.
