SUN price has been consolidating after getting that first huge rally following the launch of the platform and subsequent shilling by Tron Founder Justin Sun. The retrace has also been exacerbated by general market conditions owing to the Bitcoin price erratic movements. However, Sun announced a 100% on-chain buyback and burn for SunPump. This is expected to boost SunPump price to new highs.

Justin Sun’s 100% Burns Impact on SUN Price

Initially, the community had suggested burning the liquidity LP tokens as a way of gaining the trust of the broader crypto community. However, Sun saw the limitations of this approach and decided to implement the 100% buyback and burn method on September 3. According to Sun, this latter approach is straightforward and easier to verify.

Regarding the issue of revenue buyback and burning for @sunpumpmeme , the community previously suggested burning liquidity LP tokens because this approach is used by mainstream meme tokens like SHIB.

Burning LP tokens has several advantages, including increasing token liquidity…

— H.E. Justin Sun孙宇晨(hiring) (@justinsuntron) September 3, 2024

SunPump has a total supply of 19.9 billion tokens, with 9.8 billion in circulation. At a $278 million market cap, buyback and burns can quickly propel the asset to a $1 billion market cap and beyond. 

SUN broke its all-time high market cap on August 25 after surging due to the short meme season on the Tron network. The last time SUN hit this market cap, it only had a 21,000,000 total supply, and the SUN price topped $50.

The buyback and burn are directly proportional to the fees generated by the SunPump platform. According to Dune Analytics, SunPump’s revenue from token launches dropped to its lowest since August 16. On September 3, the platform only generated 195,671 TRX ($29,743) in revenue.

However, at the height of its popularity, the platform generated over $555,000 in revenue in a single day, showing the potential for the buyback and burns to grow as the platform expands.

Technical Analysis Hints Bullish Rebound

Although the longer-term trend remains bullish, SUN is in a short-term sideways consolidation, with price oscillating between the 50% Fibonacci retracement (Fib) level at $0.028 and the 61.8% level at $0.026.

SUN price is likely to find resistance around the 23.6% Fib at $0.033, with a break above this indicating a potential continuation of the uptrend with up to a 90% increase. Conversely, the 61.8% Fib at $0.026 provides strong support. A further decline towards the 78.6% Fib at $0.022 is likely if this level is breached.

The price is currently hovering around the 50% retracement level, often seen as a critical point where the market decides on the next move. The confluence of the 61.8% retracement level with the lower boundary of the recent range makes it a key support area.

SUN Price Analysis Chart

SunPump price action also sports what could be a double top forming. It is crucial that the price maintains above the 61.8% Fib level. Otherwise, the asset may wipe out all its gains in the last month.

Overall, price volatility could soon follow with the developments in SunPump’s fundamentals. Since the 100% buyback and burn news release, SUN price has remained largely lull as investors scan the sentiment across the crypto space.

The post Here’s Why SUN Price Could Explode 300% After SunPump Buyback & Burn Plan appeared first on CoinGape.

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Filed under: News - @ September 4, 2024 8:26 am