PUMP Token Jumps 15% on Pumpfun Buybacks: Why Are Investors Still Cautious?

Pump Token Surges 15% as $11 Million Buyback Sparks Market Buzz – But Are Bulls Getting Ahead of Themselves?

The Pump Token has taken center stage in the cryptocurrency market, posting a striking 15% rally in just 24 hours. The surge follows an aggressive buyback program from the PumpFun development team, which executed one of its largest token repurchases in history earlier this week.

While the rally has ignited excitement among traders, seasoned investors remain cautious. Many are questioning whether this spike marks the beginning of a sustained uptrend or if it’s a short-lived price pump that could face an equally sharp correction.

This is not the first time a buyback has triggered momentum in the memecoin space. However, the scale, timing, and market reaction to this event have set the stage for a closer examination of Pump Token’s market fundamentals, investor sentiment, and possible next moves.

Source: Dune PumpFun

What Triggered the Pump Token Rally?

As of the latest market data, Pump Token (PUMP) is trading around $0.004020, representing a 15% daily gain. Its 24-hour trading volume has surged to nearly $500 million, indicating high liquidity and active participation from both retail traders and whales.

The latest uptrend began shortly after PumpFun announced a massive $11.645 million buyback on August 12. This was the second-largest single-day repurchase in the project’s history, according to on-chain analytics platform Lookonchain.

Buybacks are a common strategy to support token prices by reducing the circulating supply, thus potentially increasing scarcity. In PumpFun’s case, the move was met with immediate bullish sentiment, as reflected in the 38.67% spike in trading volume.

Source: X

However, crypto market veterans know that buybacks alone are not a guarantee of sustained growth. For the rally to continue, the project will need consistent market catalysts, robust community support, and favorable broader market conditions.

Inside the Buyback Strategy

In the hours following the major repurchase, the PumpFun team doubled down on its market support efforts. Within a four-hour window, they acquired 175.3 million additional PUMP tokens, valued at approximately $705,000.

Cumulatively, buybacks have now removed over 7.66 billion tokens from circulation — worth more than $43 million at current prices. This has pushed the buyback price close to the project’s initial coin offering (ICO) levels.

Interestingly, analysts have noted that the average buyback price remains 40% higher than the current market price. This suggests that while the team is absorbing selling pressure, the market has yet to fully respond with a sustained upward revaluation.

The strategy here is clear: reduce circulating supply, establish psychological price floors, and fuel momentum for a potential breakout. In the high-volatility world of memecoins, such measures can either create powerful bull runs or set the stage for sharp retracements.

Market Indicators: Bulls in Control, but for How Long?

From a technical analysis standpoint, Pump Token is currently showing bullish signals:

• MACD: Still in bullish territory, indicating that buying pressure remains dominant.

• RSI (Relative Strength Index): Around 60, showing strong buying interest without entering the overbought zone.

• Volume: Significant spikes in trading activity, confirming active market participation.

However, resistance looms near $0.00420, which will be the next major test for bullish control. Failure to hold above this level could result in a pullback toward $0.00385, which is a key support zone.

The balance between short-term traders taking profits and long-term holders accumulating more tokens will ultimately determine whether this rally has legs.

Why Traders Are Still Cautious

Despite the excitement, there are reasons for caution. The fact that the average buyback price is significantly higher than the current market level means the team is essentially propping up the price without immediate market validation.

If broader market sentiment turns negative — for instance, due to macroeconomic events, Bitcoin price corrections, or sudden sell-offs — Pump Token could face pressure that even aggressive buybacks may not offset.

Additionally, memecoins, by their nature, are prone to rapid shifts in sentiment. Without clear utility developments, strategic partnerships, or roadmap milestones, sustained momentum may be hard to maintain.

Short-Term Price Forecast

Crypto market analysts tracking Pump Token’s movement are outlining two key short-term scenarios:

1. Bullish Breakout:

   • If the token clears $0.00450 and maintains upward momentum, the next target range could be $0.00480 to $0.00500.

   • Increased volume and consistent buybacks could drive this breakout.

2. Bearish Pullback:

• If resistance at $0.00420 holds and volume tapers off, the token could retest the $0.00385 support level.

• A break below this support could expose the token to deeper losses toward the $0.00350 area.