PUMP Is Down 15%, But Why Are Traders Betting $674 Million on It in the Futures Market?

After a much-hyped Initial Coin Offering (ICO) last weekend, the Pump.fun (PUMP) token is facing its first major test, with its price dropping over 15% in the last 24 hours to trade about $0.004355 on Saturday, July 19. But while the price chart is flashing warning signs, a massive surge of activity in the futures market suggests many traders are betting big on a recovery.

As a result, PUMP price has slipped below the listing price of , according to market aggregate data from CoinGecko. However, PUMP price has yet to drop below the ICO price of $0.004, which is a major support level bolstered by the majority of the buyers.

$674 million on July 19

The PUMP token also has recorded more positive funding rates in the past week, which is associated with bullish sentiment.

The Pump.fun project raised more than $500 million, which is crucial to support its operations in future including token buybacks. In a bid to keep the ecosystem vibrant, the Pump.fun team the launch of its creator fees for community takeovers.

The creator fees program is meant to reward the token holder who puts in more work in providing value to a memecoin project. Furthermore, Pump.fun has facilitated the launch of millions of tokens but a few dozens have taken off.

The first beneficiary of the creator fees program was X user for building the Chill House page, which is dedicated to the Chillhouse meme.

Meanwhile, the Pump.fun platform has faced intense competition from Bonk (BONK)-backed LetsBONK.fun meme launchpad. According to aggregate , LetsBONK.fun recorded a 24-hour trading volume of about $759 million, thus a market share of 55% on the Solana network. On the other hand, Pump.fun posted a 24-hour volume of $519 million, thus a market share of 37%.

The PUMP price has slipped below a crucial support level following its 15% drop in the past 24 hours. The altcoin formed a double-top, coupled with bearish divergence of the four-hour Relative Strength Index (RSI).

With the PUMP price having respected a falling logarithmic trend, the midterm bearish sentiment is likely to persist. The bearish sentiment will be invalidated if PUMO price consistently closes above $0.0067.