PUMP Drops 49.77% Within a Day Following Significant Market Pullback

On September 26, 2025, PUMP plummeted by 49.77% in a single day, dropping to $0.005027. Throughout the previous week, the asset suffered a dramatic 2357.8% decrease. Despite this, PUMP posted impressive gains of 1101.73% over both the past month and year, highlighting its extreme price volatility.

This steep decline seems to be part of a wider market adjustment rather than being caused by any specific event. There have been no recent updates about protocol modifications, governance changes, or new exchange listings that could account for the sudden drop. Technical signals, such as moving averages and the RSI, indicate that the asset may have been overbought during its recent rally, prompting traders to take profits and triggering liquidations in leveraged positions.

PUMP is currently trading beneath important moving averages, a pattern that often points to negative short-term sentiment. The RSI has entered oversold levels, but this by itself does not ensure a price rebound. Experts suggest that if the price remains above $0.004, it could establish a support base and possibly stabilize before making another upward move, consistent with its historical volatility trends.

Backtest Hypothesis

An effective trading method might be to use a mean-reversion strategy, utilizing the 20-day and 50-day moving averages to guide buy and sell decisions. This approach would involve purchasing PUMP when it moves above the 20-day simple moving average and selling when it drops below the 50-day SMA, with stop-loss and take-profit points determined by volatility indicators like the ATR. Given PUMP’s history of sharp price swings, this strategy aims to benefit from short-term reversals while managing risk in a turbulent market. The underlying assumption is that the asset will continue to show strong mean-reverting behavior, especially when its price diverges notably from key technical benchmarks.