Trump memecoin jumps 80%, $30M liquidations hit traders

Official Trump (TRUMP) rallied above $3, at one point adding over 80% to its price. TRUMP rallied during Asian trading hours, wiping out more than $30M in liquidation.

TRUMP rallied above $3, later to return to $2.94. The meme token is still down by over 90% from its highs, but the recent rally showed the asset was quick to respond to any news of new crypto activities from the TRUMP family. 

TRUMP trading volumes also reached a three-month peak above $1.79B, spiking immediately after a long period of depressed activity. 

The main driver of the rally was a short squeeze, causing $8.59M of short liquidations on Binance. TRUMP went through $30M in total liquidations for the past 24 hours, becoming one of the leading tokens to undergo a short squeeze. 

The TRUMP rally also followed the rapid BTC recovery above $79,000, followed by a quick slide. This raises the question whether the TRUMP rally is sustainable beyond the wave of short liquidations. 

Why did TRUMP rally?

The main driver of the pump on Asian markets was a rumor of a new Trump family coin launching on Robinhood. At the time of the biggest price changes, the rally was unconfirmed, and only mentioned on social media. 

Some traders chose to short TRUMP, expecting the new launch to drain any excess liquidity from the meme token. However, the wave of short positions caused different market reactions, as most of those positions were liquidated. 

As TRUMP moved above $3, most of the existing short positions were liquidated, with almost no remaining liquidity up to $3.50. This positioning may mean the TRUMP rally is over. However, traders would be more cautious in setting up new short positions. 

Is the TRUMP rally sustainable?

The meme token rally showed the TRUMP brand was among the more resilient in crypto space, and capable of making short-term reversals. 

TRUMP also rallied despite the recent claims of Justin Sun on achieving legal victory over World Liberty Fi for his frozen assets. Sun also did not harm the brand after his recent exposure of USD1 as an asset that could be frozen and clawed back from user wallets. 

Following the TRUMP rally, the World Liberty Fi token WLFI also expanded to a one-month peak of 0.07, before correcting to its usual range of $0.06. The recent market volatility caused rapid recoveries for multiple assets, but also showed signs of a rapidly reversing trend. This would make the TRUMP and WLFI rallies unsustainable. 

There are also no confirmations that either WLFI or TRUMP would have a new ‘use case’, or that holders would receive any additional allocations in the case of a new coin launch. 

Despite the setback, the TRUMP meme token open interest is back to $172M, the highest level since April. The presence of newly built short and long positions may lead to more active trading and price fluctuations. At the same time, traders are still monitoring social media and on-chain data to intercept any new asset launches, or see a confirmation of a new Trump family asset.