Token’s Value Plummets Below Initial Price After Unprecedented Trading Volume Collapse

Pump.fun Token Crashes Below ICO Price After $600M Hype Bust

In a shocking turn of events, the highly anticipated Pump.fun token has crashed below its initial ICO price just days after raising a staggering $448.5 million from over 10,000 participants during its public sale.

Despite boasting an impressive 24-hour trading volume in excess of $1.1 billion, the market remains bearish as bulls failed to defend key support zones. The Pump.fun token is now trading at approximately $0.00406, marking a 21% drop in just 24 hours and officially below its initial ICO price.

Data from BitMEX reveals that nearly 60% of early investors have dumped their tokens, while only 3% have increased their positions. This drastic shift in sentiment has intensified bearish momentum, with previous resistance now forming around the $0.0052 mark.

The token’s collapse is further exacerbated by a failed $2.3 million buyback attempt by Pump.fun, which has only served to amplify selling pressure on the market.

In addition to this, open interest in PUMP perpetual contracts has dropped by over 16%, now standing at $629 million according to Coinalyze. This significant decline suggests a waning of speculative interest and a fading of market enthusiasm, mere days after its initial public offering.

As one prominent trader, Crypto Bully, highlights the token’s collapse is predictable unless a strong catalyst appears. Despite oversold signals emerging on Stochastic RSI, traders remain cautious due to the scale of recent outflows.

Meanwhile, another crypto analyst, Gem Hunter, has warned that PUMP’s crash was not unexpected, citing key red flags including the founder calling presales scams while still raising $500 million and failing to provide an airdrop despite extracting $1.5 billion from the community. The token’s lack of real value added to Pump.fun has also contributed to its sharp decline.

In the short term, analysts are warning that the token could slide further, emphasizing the risks associated with post-ICO hype cycles in today’s market.

The sudden downturn for Pump.fun has left many investors wondering what went wrong and whether this marks the beginning of a broader market correction.

Source: coinpedia.org