Pump.fun (PUMP) Price Collapses 34% as Institutions Trigger 40% Drop Risk Below Key Support

Pump.fun’s (PUMP) price has collapsed below a critical support level of $0.004035, sparking concerns of further declines as investors brace for a potential 40% drop to $0.0024. The breakdown, confirmed by repeated failed attempts to reclaim the level over recent sessions, has triggered a wave of selling pressure from institutional buyers who had previously purchased tokens at the $0.004 public and private sale price. With the asset now trading at $0.00371—a 34% slump in the past week—market participants are scrutinizing whether the downward momentum will persist or if a short-term rebound could ignite a speculative rally.

The sell-off intensified after two major funds, which had acquired tokens at the $0.004 entry point, began offloading large portions of their holdings. Lookonchain data reveals one fund moved 17 billion tokens to exchanges, while another liquidated its entire 12.5 billion token allocation. This mass divesting suggests institutional confidence in the asset’s near-term trajectory has waned. Analysts note the price now sits below both the private and public sale benchmarks, further undermining bullish sentiment.

Technical analysts are divided on the path forward. CryptoPatel predicts a likely descent toward $0.0024, a historical demand zone 40% below current levels, should the bearish trend continue. Meanwhile, Captain Faibik highlights a bullish “PO3” pattern and a falling wedge formation on the 1-hour chart, which could signal a 50% rebound if buyers push the price back above the $0.004035-$0.004061 resistance range. However, this scenario hinges on a reversal that has yet to materialize, with sellers currently dominating the immediate outlook.

The recent volatility follows a high-profile initial coin offering (ICO) by Pump.fun on July 13, which sold out in 12 minutes. A subsequent token airdrop by Kraken to users affected by purchase errors and an accidental 10 million token burn—valued at $75,000—have added to the narrative of market instability. While these events are unlikely to directly impact the price trajectory, they underscore the speculative and volatile nature of the asset, which has seen sharp swings in a short timeframe.

With the asset now trading below key psychological and structural levels, the focus remains on whether PUMP can stabilize or if the current sell-off is part of a broader capitulation phase. Institutional outflows and technical indicators suggest caution for holders, but lingering demand from pattern traders hints at potential volatility ahead. The market’s next move will likely depend on whether buyers can mount a coordinated defense at the $0.004035 level, which has repeatedly failed to hold thus far.