Pump.fun (PUMP) is gaining more attention as the token broke out of its descending wedge formation on Wednesday, January 28.
The movement of the asset has been highlighted by crypto analyst Crypto Patel, as the token has been subjected to considerable pressure in the past months. The movement of the token has placed it in the high-timeframe accumulation phase.
Since the breakout, the price has been consolidating around the old resistance level, indicating that buyers are starting to support the price at higher levels.
Crypto Patel says that the breakout and subsequent retest of the high-timeframe neckline indicate that the bullish scenario is likely to be true since the breakout was not a price spike.
Also Read: Pump.fun (PUMP) Faces $0.00265 Resistance with Double Top Formation
Inverse Head-and-Shoulders Pattern Reinforces Setup
Adding to the positive sentiment, the chart formation shows the formation of an inverse head and shoulders pattern, with the price heading towards a potential breakout. Strong buying pressure is being seen in the $0.0022-$0.0025 range, which further supports the idea of accumulation rather than distribution.
Source: Crypto Patel X Post
According to the upside potential expansion target projections made by Crypto Patel, the targets are as follows: $0.00504, $0.00867, $0.01500, and possibly $0.02297+ if the bullish momentum is sustained.
It is important to note that the setup has a positive risk-to-reward profile as long as the high-timeframe demand is still intact.
It is also important to note that the downside risks are still present. A high timeframe close below $0.00168 will negate the reversal pattern and could lead to a resumption of the downtrend.
PUMP Technicals Support Recovery Phase
According to TradingView, as of Wednesday, January 28, PUMP indicates a clear sign of a recovery phase, with the local bottom having been formed around the 0.0017-0.0018 area in early January. This has resulted in higher lows and higher highs.
Source: TradingView
The MACD indicator has also moved higher, with the signal line rising and the histogram bars rising into positive territory, indicating increasing bullish momentum. The Relative Strength Index (RSI) has also moved higher into the low 60s.
The technical indicators suggest that if the momentum is sustained, the token may continue to rise, although experts are of the view that the token may consolidate in the $0.0032 resistance zone.
Also Read: Pump.fun (PUMP) Approaches Key Resistance With $0.0033 in Focus
