Pump.fun (PUMP) has surged by 5% in the past 24 hours, and it is once again hitting our $0.0050 target, as protocol fees keep booming.
Trading volumes continue to be high, currently accounting for 19% of the asset’s circulating market cap.
This indicates persistent buying pressure and an ongoing short squeeze, following PUMP’s recovery off the $0.0035 area.
The macroeconomic backdrop has taken a back seat in the past couple of weeks, as the market now has a much clearer picture regarding the U.S. Federal Reserve’s path when it comes to interest rates.
According to data from FedWatch, 68% of market participants are expecting another rate hike during next month’s meeting of the Federal Open Market Committee (FOMC).
That said, those forecasts could change depending on how the PCE Price Index behaved in August. On Wednesday, the market will digest this key inflation figure, the one used by the Fed to analyze how prices are evolving, along with data points associated with economic growth.
Pump.Fun Protocol Fees Rose Near Record Levels Last Week
Pump.fun has rallied by 9% in the past 30 days, but seems ready to commence its next leg up now that concerns about the macro backdrop have eased.
On-chain data supports a bullish outlook, as protocol fees jumped near their recent all-time high last week. According to DeFi Llama, Pump.fun collected $45 million from users during this period.
This figure was just $100,000 away from the project’s current record, a milestone that was hit during the last week of August.
This indicates that usage levels are strong, at a point when agencies like the U.S. Securities and Exchange Commission (SEC) are pushing forward favorable regulation for the crypto sector in the United States.
There’s a significant correlation between fee growth and the trajectory of the price of PUMP. Hence, we expect that new all-time highs on this metric could support the continuation of the current uptrend in the next few weeks.
PUMP Eyes 40% Gain as Bullish Momentum Accelerates
Today, PUMP is breaking past a key resistance and our previous target of $0.0050. This could mark the beginning of the token’s next leg up.
Top altcoins like Solana (SOL) and Ethereum (ETH) have already entered a bullish phase. However, niche projects like PUMP could deliver higher gains due to the protocol’s unique use case and value proposition.
Memecoins are typically the last to rally during bullish phases. If, or once, they do, Pump.fun will benefit significantly, as it has in previous cycles.
Hence, we expect that the token’s rally will continue toward the next area of resistance in the daily chart, which is the $0.0070 – $0.075 level. This implies a 40% upside potential in the next few weeks for PUMP.
The Relative Strength Index (RSI) has sent a buy signal upon climbing above the 60 level, indicating that bullish momentum is accelerating. All of these price action signals, paired with robust fee generation, are setting the stage for another explosive move to the upside.
