TRUMP loses key support after $161M wipeout – Is a recovery to $3 possible?

Official Trump [$TRUMP] recently lost more than 21.5% of its market cap, equivalent to $161 million. At the time of writing, the memecoin’s market cap was “just” $232 million.

This sharp decline happened just before President Trump’s crypto conference at Mar-a-Lago in Florida. The event was graced by popular individuals, alongside the top 297 $TRUMP holders. Hence, the question – What really influenced this price crash?

Bearish fundamental drivers

The memecoin saw heightened selling activity just before the crypto conference, a classic “sell the rumor” event. Here, it’s worth noting that even the $TRUMP team had been offloading their holdings over the past three weeks, selling 15.54 million $TRUMP worth $46 million.

Additionally, there was an assassination attempt on President Trump at the White House Correspondents’ Dinner. A similar action in 2024 led to price appreciation for Trump-themed memecoins – MAGA and $TRUMP.

However, this time, it was different. The assassination attempt soured market sentiment, leading to waning investor confidence.

$TRUMP loses month-long support level

The memecoin’s price charts highlighted this weakness. $TRUMP lost its month-long support level at $2.80, with the same now down about 96% from its high. Hence, $TRUMP hit an all-time low of $2.459.

During the three weeks of the team’s selling, the market stayed in a sideways range between $2.80 and $3.08.

The crash was evidenced by the findings of the Cumulative Volume Delta (CVD). It showed that over 10 million tokens were sold during the crash. The RSI also hit oversold levels at 30, indicating maximum sell pressure.

It should be noted though that at press time, the memecoin had started to recover some of its losses. This implied that the selling could be a tactic to shake out some of the buyers. That would classify the sudden crash as a fakeout.

Conversely, $TRUMP may continue to drop on the charts as the market structure remains bearish.

A spike in $TRUMP’s leveraged longs liquidations

The price decline was also driven by the liquidation of leveraged long positions. The long squeezes accelerated the downtrend.

Numerically, the OI-Weighted Funding Rate dropped to -0.2495% – Their lowest level since February.

The liquidation heatmap revealed that the sell pressure was yet to diminish. Millions of tokens were clustered below $2.60, suggesting that another drop cannot be overlooked just yet.

Still, there are still clusters of orders at $2.70 and $2.90-$3.00, coinciding with the top of the month-long range. Liquidating the orders at $2.70 could trigger a short squeeze, propelling the memecoin back to $3.

To sum it up, the data showed that while sellers have been in control, bulls may be starting to return. If $TRUMP closes and remains above $3, it would confirm a shift in market structure to bullish.

Final Summary

• $TRUMP lost 21.5% of its market cap due to the “sell the rumor” effect, the Trump assassination attempt, and a long squeeze.
• $TRUMP’s market structure remains bearish, but that could change if the price closes and stays above $3.