PUMP experiences a dramatic -1264.89% shift within 7 days as a result of unexpected market fluctuations

On September 27, 2025, PUMP experienced a dramatic 546.08% decrease in value over a single day, falling to $0.004986. Over the course of seven days, the asset declined by 1264.89%, but it had previously surged by 1075.08% in the past month and maintained the same percentage increase over the year.

The abrupt plunge in PUMP’s price during the first week of September 2025 was primarily triggered by shifts in liquidity and intense trading activity. After a period of strong upward momentum in the weeks and months prior, the asset underwent a steep correction that surprised many investors. This weekly drop sharply contrasted with the significant gains seen over the previous month and year, underscoring the asset’s high volatility and the swift changes in market sentiment it can experience.

PUMP’s recent price action is a textbook example of an asset experiencing rapid gains followed by a corrective phase. The substantial monthly and yearly increases, both exceeding 1000%, suggested heavy accumulation and speculative interest. However, this also created conditions ripe for a notable pullback once the market reacted to profit-taking or changes in liquidity. Market experts believe that this sharp drop may be a short-term correction rather than a sign of a fundamental change in the asset’s long-term prospects.

During this period, PUMP’s technical indicators showed multiple overbought signals, with prices climbing above major resistance points before quickly reversing. The lack of sustained bullish momentum after entering overbought territory contributed to the loss of upward drive and the subsequent price fall.

Backtest Hypothesis

To study PUMP’s behavior during similar price movements, a backtesting strategy was proposed. This method focuses on detecting overbought scenarios using widely used technical tools like the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD). The strategy recommends opening a short position when the RSI surpasses 70 and diverges from the price trend, signaling that the bullish run may be losing steam. A stop-loss is set just above the latest swing high, while the take-profit target is either at the nearest support level or based on a predetermined percentage.

Applying this strategy could have taken advantage of PUMP’s sharp decline in September 2025 by entering a short trade at the height of the overbought condition. The approach stresses the importance of strict risk controls to minimize exposure during periods of high market volatility.