Pump.fun faces a crossroads: a strong breakout or pressure for a deep correction?

Pump.fun experienced a strong upward momentum at the beginning of the week, opening up expectations for a new breakout phase with clear growth drivers. This rally previously demonstrated the potential to establish a sustainable upward trend for PUMP.

However, the market subsequently saw a correction, making the outlook uncertain. Contradictory behaviors from PUMP holders have clouded the prospects and raised questions about the sustainability of the upward momentum.

Diverging Behaviors of PUMP Investors Are Becoming Clearer

The current market sentiment remains divided, although smart money (smart money) has somewhat supported the price. Smart money typically belongs to experienced investors, large organizations, venture funds, and influential whale wallets. These groups often adopt accumulation strategies during volatile market periods, significantly impacting price trends.

Smart money entering PUMP | Source: NansenNotably, in the past week, smart money wallets have purchased approximately 48 million additional PUMP tokens, increasing total holdings to 5.8%. This move reflects confidence in the future bullish outlook. If the accumulation trend continues, PUMP could benefit from liquidity support and reduce the risk of sharp declines.

However, alongside active smart money activity, macro indicators show cautious signals. Network data recorded a sharp decline in the number of new wallets participating in PUMP.

Within just 48 hours, the number of new wallets created dropped from 8,570 to 2,201, a decrease of up to 74%.

This decline signals waning interest from retail investors, with limited new capital flowing in. In the altcoin market, new investors play a crucial role in maintaining upward momentum.

New PUMP addresses | Source: SantimentIf there is no new demand from subsequent participants, maintaining price strength will become increasingly difficult, even with support from whales.

What Are the Breakout Prospects for PUMP?

Recently, PUMP broke through the “cup and saucer” pattern—a technical formation often indicating a continuation of an upward trend. According to technical analysis, this breakout is expected to yield a 57% increase, from $0.00264 to the target level of $0.00420.

However, the price failed to sustain the expected rally, indicating hesitation from the demand side.

Current mixed signals suggest PUMP is likely to continue consolidating around the support zone of $0.00264. Maintaining this price level will help preserve the bullish structure.

PUMP Price Analysis | Source: TradingViewIf PUMP can regain the resistance zone of $0.00278 and turn it into support, the growth momentum could be restored, and the breakout could continue.

Conversely, if new capital continues to decline, the risk of correction increases. If the support level of $0.00264 is broken, PUMP may retreat to the next support zone at $0.00242. If selling pressure persists, the bullish trend will be completely invalidated.

In a negative scenario, sustained selling pressure could push PUMP’s price down further to the $0.00212 level, confirming a breakdown below.

Mr. Giáo