Official Trump [TRUMP] had made a fantastic bullish turnaround the previous week. The memecoin had rallied nearly 90% in five days, when the price went from $1.39 to $2.62 by Sunday, the 23rd of August.
Since then, it has seen a mild retracement but was still comfortably above the $2 mark.
Statements from U.S. President Donald Trump for Congress to pass the CLARITY Act and support for the U.S. to purchase substantial amounts of Bitcoin [BTC] had sent the crypto market sentiment into a bullish frenzy.
The altcoin market made a resounding rebound on the back of Bitcoin’s momentum, leading to talk of another altseason.
The TRUMP team continued to distribute into strength, making a sale worth $3.39 million, adding to the selling pressure that pushed the token below $3.
Why a TRUMP price dive below $2 is still likely
The bullish structure break (green) was the biggest highlight on the 1-day timeframe of the memecoin. This meant investors and swing traders can have positive price expectations, despite the heavy volatility during the previous weekend.
On Saturday, the 22nd of August, TRUMP rallied to $3.68 but was forced to close that daily session at $2.38. This price action underlined intense profit-taking activity. The technical indicators also highlighted the same.
While the OBV made new highs, the CMF was at a firm bearish reading of -0.23. This incongruence can be explained by the severe volume that pulled prices far below the $3.68 high.
In other words, the volume was not inherently bearish, but the path ahead could be dangerous for the bulls.
The 1-day swing structure remained bullish. The 78.6% Fibonacci retracement level at $1.86 is likely to be tested now that TRUMP prices have fallen below the 61.8% level at $2.24.
Expect a recovery, but be prepared to take profits
A price drop below $2 would likely allow swing traders to go long. The high volatility in recent days meant risk management would be key. It is unclear if profit-taking pressure has eased enough to allow another rally beyond $3.
Moreover, Bitcoin was grappling with the $83k supply zone and hasn’t claimed this area as a support zone. Until then, the threat of a sell-off would be in the back of investors’ minds.
A drop below $1.76 would be an early sign of bearish dominance. Until then, investors can think of a price dip below $2 as a feasible buying opportunity. Bearish trend confirmation would be at hand if TRUMP prices fall below the $1.36 swing low.
Final Summary
- The TRUMP memecoin volatility over the weekend has raised worries of intense profit-taking halting the uptrend.
- A drop toward $1.80-$1.90 is likely, but any further losses would begin to question TRUMP bulls’ control of the market.
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