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The Launchpad that drove the meme coin launch mania early this year faces a brutal reality check as the markets’ September history of negative returns materializes.
Messari’s data shows Pump.fun grappled with fading momentum the previous week, with sentiment, mindshare, and prices maintaining a downward trajectory.
Buybacks, which kept PUMP’s price elevated by reducing selling pressure, have slumped by 50% within seven days to $1.27 million, whereas revenue plummeted to $1.3 million.
Pump’s chart tells the story: – Mindshare falls – Sentiment falls – Price followed
That coincided with trading activity hitting 3-month lows.
Pump.fun’s native token wasn’t an exception. PUMP lost over 25% of its value in the previous week amid faded interest from whale investors and retail traders.
This article explores the top factors contributing to Pump.fun’s prevailing struggles.
Meme crypto market downturn
The Solana-based token generator decline comes as the entire meme asset space faces bearish pressure.
For instance, PUMP dipped 16% on September 22 as the market capitalization of meme coins lost 10% on the same day.
The sector-wide dips indicate that speculative hype that propelled many meme tokens early this year may be running out of gas.
Most creator coins on Pump.fun, including MITCH and RASMR, have lost up to 90% from their all-time highs, a harsh reminder of how ugly hype cycles can become.
Coingecko data highlights bearishness in the broader meme token sector with plummeting market cap and trading volumes.
Source – CoingeckoWhales add bearish pressure
Large-scale investors have also dented Pump.fun’s ecosystem with massive PUMP sell-offs.
Data indicates that short positions accounted for over 50% of the latest trading volume on the platform, with contracts worth over $20 million closed within a day.
Such exits have drained liquidity and magnified bearish sentiments.
Smaller traders appear unwilling to take risks amid the whale exodus.
Solana’s slowdown
Pump.fun’s performance remains tied to Solana activity.
For example, trading volume on the blockchain dipped to $229 million from $770 million, as new asset launches also slowed.
Solana’s impressive performance early this year fueled Pump.fun’s explosive growth.
Even the launchpad’s co-founder emphasized that Solana propelled their project.
“A large part of our success has been driven by the fact that we’re on Solana.” –@a1lon9 Scale your startup on Solana 📈
With network activity dwindling, Pump.fun has lost most of the steam that catalyzed its rise in popularity.
Intensifying competition
Also, increased rivalry from projects like the trending Aster and MemeCore diluted Pump.fun’s visibility as they gain attention.
Furthermore, market participants seem to exit high-risk tokens, rotating to established and utility-based assets.
Indeed, the latest $1.5 billion liquidation event likely shifted risk appetite, putting speculative platforms in a challenging spot.
PUMP price outlook
Pump.fun’s native token trades at $0.005255 after losing more than 6% in the past 24 hours.
Chart by CoinmarketcapTechnical indicators, such as the MACD and the RSI, signal further dips before PUMP stabilizes.
Meanwhile, broad market actions will shape Pump.fun’s future.
The platform thrives on speculative activities, which heighten during bull runs.
Thus, market-wide rallies could trigger a resurgence for the meme generator.
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