Pump.fun Legal Battle Sends Shockwaves Through PUMP Token
The memecoin launch platform Pump.fun (PUMP) has become the center of intensifying legal scrutiny after a U.S. federal court approved an expanded class-action lawsuit targeting the Solana Foundation, Jito Labs, Pump.fun, and several related executives. The case follows explosive revelations from a whistleblower who disclosed roughly 5,000 internal chat messages, allegedly shedding light on insider trading and coordinated market manipulation.
According to the lawsuit, the accused parties designed and operated a system in which an estimated 98.6% of the nearly 14 million memecoins launched on Pump.fun ultimately collapsed to zero. Plaintiffs claim the resulting damage to retail participants ranged between $4 billion and $5.5 billion, placing the case among the most significant controversies in the recent memecoin cycle.
Market Reaction and Recent Price Behavior
Against this backdrop, PUMP’s market performance has deteriorated sharply. Since December 9, the token has declined by approximately 39.3%, falling from $0.0032 to around $0.00196. This move marked a decisive breakdown below the long-standing $0.0025 support level, a zone that had been tested and defended multiple times since July.
Technical indicators reflect sustained selling pressure. The Chaikin Money Flow (CMF) has remained below -0.05 for much of the past six weeks, while the Money Flow Index (MFI) near 40 continues to signal bearish momentum. Recent price action was used to plot Fibonacci retracement levels, which suggest that short-term rebounds could encounter resistance near $0.0025–$0.0026.
Leverage Levels and Short-Term Dynamics
Derivatives data adds further context. Coinalyze metrics show Open Interest rising by 4% over 24 hours, even as prices slipped by roughly 1.6% during the same period. Meanwhile, liquidation data highlights concentrated leverage around $0.00193 and $0.00207, levels that could attract short-term price movement before any directional shift.
As summarized in market commentary, “A push toward $0.00207–$0.0021 would likely trigger bearish continuation.” At the same time, analysts caution that rebound attempts toward the $0.0023–$0.0025 zone could face strong selling pressure, reinforcing the broader downtrend.
Overall, PUMP remains under pressure as legal uncertainty and weak technical structure continue to weigh on sentiment, keeping market participants highly cautious.
