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- TRUMP’s 9% jump in the past 24 hours signals that some investors are seeing this as a buying opportunity.
- But does the data point to a trap?
Trump’s official memcoin ( TRUMP ) has fallen 60% from its all-time high of $75, but is up 9% in the past 24 hours to press time, suggesting investors are piling in again.
Is there a rebound coming? What does this mean for the wider market? Could memecoin be taking away liquidity from other players?
The answer seems clear
Let’s go back a bit. Just a week ago, the crypto market was sent into a frenzy with the launch of Donald Trump’s memecoin – TRUMP.
In just 24 hours, his market capitalization jumped to $15 billion, just in time with his inauguration.
It was a moment of clear weather. But while TRUMP stole the limelight, the rest of the crypto market struggled. Bitcoin (BTC) was down 2.07%, with only a slight price gain of 0.93% on the big day.
But as with all memecoins, the hype was short-lived. The RSI lit up as “overbought” and selling pressure soon followed. Some investors saw millions wiped from their portfolios, while others walked away billionaires.
TRUMP is now down 60% from its record high of $75, with a staggering 61.33% of its market value evaporating. But, as always, the market offers a second chance.
For the savvy investor, fall might just be the chance to pick up this memecoin at a deep discount. After all, a 9% jump in the last 24 hours has sparked renewed interest.
Source: Santiment
But is this really the opportunity it seems? The data suggests that this may be a trap.
Trading volume, which jumped to 39.06 billion when TRUMP hit its ATH, has collapsed, now sitting at just 4.65 billion – only a slight increase of 7% from the previous day.
That set the stage for a possible short squeeze, with $6.86 million in short positions already wiped out.
But with volume still stagnant, it’s unclear whether this contraction can spark a sustained rally. And with scars fresh from the recent crash, many risk-averse investors are likely hesitant to return.
So with TRUMP down, can the market recover?
The crypto market cap is up just 0.40% from the previous day, but Bitcoin is still caught in a tug-of-war.
Long-term holders are cashing in their profits while fresh capital sits on the sidelines, awaiting the FOMC meeting in just three days.
Meanwhile, some investors are turning their attention to the memecoin market, where several coins are posting triple-digit single-day gains.
Source: CoinMarketCap
TRUMP is among those attracting attention, offering a tempting alternative in the short term. But will history repeat itself?
TRUMP is unlikely to withdraw liquidity from the broader market again, although caution is definitely advised.
Realistic or not, here is TRUMP’s market cap in terms of BTC
The next few days will be crucial. If the market defies expectations, TRUMP could see liquidity dry up as investors exit, and the broader market faces a bearish pullback.
However, if FOMC meeting boosts the market, TRUMP could gain serious traction by attracting capital flow and even pose a challenge to Bitcoin. Watch closely – this could be the tipping point.
