TRUMP meme coin loses steam as China-linked GD Culture Group invests $300M in Bitcoin and TRUMP
- TRUMP’s downside risks extend despite GD Culture Group, a company with China ties, investing $300 million in Bitcoin and the meme coin.
- Increasing sell-side pressure could push TRUMP to test the 50-day EMA in upcoming sessions.
- Potential volatility surge expected ahead of the exclusive dinner with US President Trump.
The Official Trump (TRUMP) meme coin continues to struggle with declining trader confidence, which has seen successive drawdowns from the weekend to $13.46 at the time of writing on Wednesday. A minor slump during the Asian session highlights the escalating downside risks despite reports of GD Culture Group, a company that trades on Nasdaq and with ties to China, raising $300 million for a stockpile comprising Bitcoin (BTC) and TRUMP.
GD Culture Group purchases $300M worth of TRUMP meme coin
GD Culture Group, a technology firm with ties to China, has announced a colossal purchase of the Official Trump meme coin worth $300 million. The company trades on Nasdaq and operates in China through a subsidiary. It relies heavily on TikTok, a video-sharing platform facing a potential ban in the United States (US).
Intriguingly, the company has only eight employees, with filings showing zero revenue from the e-commerce business it runs on TikTok the previous year.
A statement released by GD Culture Group said that the firm will spend $300 million investing in a stockpile comprising Bitcoin and the Official Trump meme coin. According to The New York Times, this investment channel proceeds from a stock sale to an unnamed entity domiciled in the British Virgin Islands. GD Culture Group confirmed the investment plan in a late Tuesday filing with the Securities and Exchange Commission (SEC).
“The Company plans to use proceeds from the offering, if any, to invest in Bitcoin and OFFICIAL TRUMP and for general corporate purposes,” the SEC filing read in part.
GD Culture Group has become one of the latest companies with foreign ties to seek exposure to TRUMP, a meme coin launched a few days before US President Donald Trump’s inauguration and linked to his family investments.
TRUMP meme coin’s uptrend stalls
The official Trump token is technically bearish, following a rejection from the previous week’s surge to $15.35. Declines will likely escalate below the meme coin’s current market rate at $13.46 based on the negative divergence of the Relative Strength Index (RSI).
If traders close positions in response to the minor instability in the market, key support levels such as the 50-day Exponential Moving Average (EMA) at $12.20 and the demand zone around $10.00 (marked red on the daily chart below) would come in handy to absorb the selling pressure and possibly liquidity before another attempt at recovery.
TRUMP/USDT daily chart
The Moving Average Convergence Divergence (MACD) indicator’s subtle sideways movement above the centre line reveals the possibility of consolidation in the current range. However, traders should watch out for red histograms expanding below the centre and the MACD line (blue) crossing under the signal line (red) to validate bearish momentum and prepare accordingly.
Despite the prevailing risks, interest in the Official Trump meme coin could surge toward the end of the week and early next week, ahead of the exclusive top 220 TRUMP holders’ dinner on May 22 with President Trump.
The team behind the meme coin notified the select 220 holders on the leaderboard on Monday via email with dinner details ahead of background checks. Volatility could erupt, propelling TRUMP above resistance at $20.00, mimicking the rally following the April dinner announcement.
Cryptocurrency prices FAQs
Token launches influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence crypto assets mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs.
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