The cryptocurrency market has experienced a cooling period following an energetic start to the week. Bitcoin (BTC) briefly surpassed the $111K mark on Monday before declining below $108K today. Ethereum (ETH) also saw a drop of over 4%, impacting major altcoins, including Pump.fun (PUMP).
Pump.fun (PUMP) has registered a notable 5% correction today. However, an analysis of its latest technical setup on lower timeframes suggests that the token may be preparing for an upward movement.
Cup and Handle Pattern Signals Possible Breakout
A detailed examination of the 1-hour chart reveals that PUMP is forming a textbook Cup and Handle pattern. This is a recognized bullish technical structure that often indicates the continuation of an uptrend.
Following a rejection near the neckline at $0.0042 yesterday, the token experienced a pullback to a low of approximately $0.0037. At this level, the 100-hour moving average provided a strong support base. PUMP has since shown a steady rebound and is currently trading near $0.0039, which represents the "handle" portion of the pattern. This phase typically precedes an attempted breakout.
What's Next for PUMP?
If the Cup and Handle formation proves to be effective, a decisive breakout above the $0.0042 neckline could trigger a significant bullish rally. This surge could propel PUMP towards its next identified technical target at $0.0051, which would represent a potential 32% increase from its current trading levels.
Conversely, if the price fails to maintain support above the 100-hour moving average and falls below $0.0037, the bullish structure could be weakened. This scenario might suggest that further consolidation is necessary before a substantial upward movement can occur.
Traders should closely monitor the $0.0042 neckline. A breakout at this level could signal the commencement of a major trend shift for PUMP.