PUMP drops 80%: how legal scandals are suffocating the Pump.fun token

The Pump.fun platform on Solana has generated a prolific memecoin ecosystem, but its native token PUMP is suffering devastating consequences. In just days, PUMP has lost over 80% from its all-time high of $0.009, dropping to $0.0018 on daily charts. Currently, according to the latest data, the token was trading around $0.00 with a 2.58% decline in the last 24 hours, while market capitalization contracted to $1.40B. This fall represents one of the sharpest corrections in the memecoin sector and is directly linked to the turbulent legal developments affecting the platform.

Federal Court approves expanded class action against Pump.fun

The legal situation has dramatically worsened when a federal court authorized an expanded class action against Pump.fun, Solana Labs, and related projects. The plaintiffs allege that the platform deliberately created conditions favorable to insider privileged trading.

The accused model worked as follows: internal figures purchased memecoin at reduced prices before public opening, then used the bonding curve to artificially inflate prices. As prices rose, insiders sold their assets to retail traders, passing losses onto unsuspecting users.

Documentary evidence is particularly damaging. Company chat logs reveal direct coordination between the Pump.fun team and Solana Labs regarding pre-emptive token purchases. This communication provided the plaintiffs with grounds for accusations under the RICO (Racketeer Influenced and Corrupt Organizations) statutes.

The figures below are alarming: out of over 14 million memecoin launched on the platform, 98.6% experienced a total collapse to zero. Damaged investors have documented estimated losses between $4 billion and $5.5 billion, transforming Pump.fun from an innovation incubator into a financial minefield.

Capital flows and mass panic accelerate PUMP’s decline

The expanded lawsuit triggered a chain reaction in the markets. Both spot and futures investors abandoned their positions, generating clearly measurable capital movements.

PUMP inflows on exchanges reached $24 million, significantly surpassing outflows of $22.9 million. The result is a positive Netflow Spot of $1.09 million, up 144.88%—an unmistakable indicator of aggressive selling by token holders.

The futures segment also reflected the same sentiment. With $142.91 million in outflows against $139.7 million in inflows, the Netflow Futures turned negative at -$3.21 million. This imbalance shows that contract liquidations exceeded new long position openings.

When the PUMP token was launched, ownership concentration was already problematic. The top 10 holders control 70.30% of the total supply, according to current data. This extreme concentration heightens doubts about decentralization and governance sustainability.

Technical indicators suggest further declines ahead

From a technical perspective, PUMP shows signs of structural weakness. The Relative Strength Index (RSI) has plummeted into oversold territory, standing at 28. At the same time, the Directional Movement Index (DMI) has fallen to 11, confirming strong bearish pressure.

Historically, when these oscillators reach such extreme levels, they signal trend continuation. If sellers do not loosen their grip, PUMP could test new all-time lows, potentially dropping even further from $0.0018.

To reverse the trend, PUMP should first recover the $0.0025 level. This move would require a minimum of buyer confidence and could signal a technical reversal. Without this recovery, the downward spiral could become self-sustaining.

Concluding considerations

The combination of legal issues, capital outflows, and negative technical signals creates a complex scenario for the PUMP token. The expanded class action represents an existential challenge not only for the token but for the entire Pump.fun infrastructure as a memecoin launch platform.