- Downside risks for TRUMP extend despite a company with ties to China investing $300 million in Bitcoin and the meme coin.
- Growing selling pressure could push TRUMP to test the 50-day EMA in the coming sessions.
- A potential surge in volatility is expected ahead of the exclusive dinner with former U.S. President Trump.
The meme coin Official Trump (TRUMP) continues to struggle with declining trader confidence, which has seen successive declines since the weekend to $13.46 at the time of writing on Wednesday. A slight decline during the Asian session highlights increasing downside risks despite reports that a Nasdaq-listed company with ties to China, has raised $300 million for a stash comprising Bitcoin (BTC) and TRUMP.
Company Buys $300 Million in TRUMP Meme Coin
A technology company with ties to China, has announced a colossal purchase of the Official Trump meme coin worth $300 million. The company is listed 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 (U.S.).
Interestingly, the company has only eight employees, and records show zero revenue from the e-commerce business it operates on TikTok last year.
A statement issued by the company said that the firm will spend $300 million investing in a stash comprising Bitcoin and the Official Trump meme coin. According to The New York Times, this investment channel comes from a sale of shares to an unidentified entity domiciled in the British Virgin Islands. The company confirmed the investment plan in a filing submitted Tuesday night to the Securities and Exchange Commission (SEC).
“The Company plans to use the proceeds from the offering, if any, to invest in Bitcoin and OFFICIAL TRUMP and for general corporate purposes,” reads part of the SEC filing.
The company has become one of the latest firms with foreign ties to seek exposure to TRUMP, a meme coin launched a few days before the inauguration of U.S. President Donald Trump and linked to his family’s investments.
TRUMP Meme Coin Rally Stalls
The Official Trump token is technically bearish, following a rejection of last week’s rally to $15.35. Declines are likely to intensify below the meme coin’s current market rate at $13.46 based on the Relative Strength Index (RSI)’s negative divergence.
If traders close positions in response to the slight 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 in red on the daily chart below) would be useful in absorbing selling pressure and possibly liquidity before another recovery attempt.
The subtle sideways movement of the Moving Average Convergence Divergence (MACD) indicator above the center line reveals the possibility of consolidation in the current range. However, traders should watch out for red histograms expanding below the center and the MACD line (blue) crossing below the signal line (red) to validate the bearish momentum and prepare accordingly.
Despite the prevailing risks, interest in the Official Trump meme coin could increase towards the end of the week and early next week, ahead of the exclusive dinner for the top 220 TRUMP holders on May 22 with President Trump.
The team behind the meme coin notified the 220 selected holders on the leaderboard on Monday via email with details of the dinner ahead of background checks. Volatility could erupt, pushing TRUMP above the resistance at $20.00, mimicking the rally following the dinner announcement in April.
