Trump Memecoin Faces Possible Price Crash Amid $500M Token Unlock and 7-Week Low in Open Interest

The Official Trump (TRUMP) meme token is facing heightened bearish pressure as its price fell over 5% on June 13, amid news of $500M token unlock. 

Currently trading at $9.98, TRUMP has seen a 4% drop over the last 24 hours despite maintaining a modest 3.08% gain over the past week. 

The broader crypto market downturn appears to be spilling into meme tokens as well, with Trump Coin showing early signs of technical breakdown. 

Adding fuel to the bearish sentiment is the looming unlock of $500 million worth of tokens, expected to hit the market by July 18, a development analysts warn could lead to a steep price correction.

Bearish Technical Indicators Signal Potential 40.9% Crash

From a technical perspective, the Trump token is currently displaying a descending triangle pattern, a classically bearish formation, that suggests sellers are gradually overpowering buyers. 

The pattern has developed as TRUMP has repeatedly tested the horizontal support level of $9.73 since late April.

Now that the price is once again challenging this key level, analysts fear that a breakdown could initiate a strong downward move. 

If this support fails, the projected downside based on the triangle’s height puts the target price at $5.75, which would represent a substantial 40.9% decline from the current value.

Weak Market Participation Undermines Bullish Momentum

On-chain and trading data further reinforce the bearish outlook for the Trump meme coin. 

The volume histogram shows a steady decline in trading activity within the triangle pattern, which indicates waning interest from both buyers and sellers. 

The lack of conviction is a red flag, especially in a volatile meme token market where momentum plays a critical role. 

Additionally, the Relative Strength Index (RSI) is hovering at 37 and trending downward, suggesting that the market is tipping further into oversold territory. 

The low RSI level is typically associated with weak bullish momentum and increasing selling pressure.

Also Read: Two Major Crypto Investors Offload $6.46M $TRUMP Memecoin Holdings at a Loss of $500,000

$500 Million Token Unlock Adds to Downside Risk

A major factor contributing to market anxiety is the upcoming unlock of 50 million TRUMP tokens, valued at nearly $500 million at current prices. 

According to data from Tokenomist, this unlock is scheduled for July 18. Historically, such events have led to increased supply in the market, causing downward pressure on token prices. 

Given the size of the unlock relative to the token’s $2 billion market cap, the risk of a supply shock is high. 

Unless there is strong demand or a coordinated effort to absorb the influx, the unlocked tokens could trigger a sharp decline in price.

Also Read: Public Citizen Blames Trump, Calls For DOJ Investigation Into $TRUMP Memecoin Citing Payments Risk

Declining Open Interest and Negative Funding Rates Confirm Bearish Sentiment

Derivatives data further amplifies concerns around Trump Coin’s near-term prospects. 

Open interest, a key metric that reflects active futures contracts, has dropped to $255 million, its lowest level in seven weeks, per Coinglass. 

The sharp decline in open interest suggests that speculative traders are backing away from the token, lacking the conviction to take new positions. 

More tellingly, funding rates have plunged to -22%, indicating that short sellers are now in clear control of the market. 

A negative funding rate of this magnitude shows that the majority of traders expect prices to fall, reinforcing the broader narrative of a potential downturn ahead for the Trump meme coin.

Also Read: Solana’s Stablecoin Supply Sees 73% Surge to $11.1B After $TRUMP Memecoin Debut