Jupiter’s buyback plan – Will it help JUP break $1?

• JUP surged 8.82% after announcing a buyback plan, aiming to lock tokens for three years and reduce circulating supply.
• With a TVL of $2.7 billion and rising protocol fees, Jupiter’s buyback could provide long-term price stability.

Jupiter [JUP] has announced a strategic buyback initiative, with 50% of all protocol fees allocated to purchasing JUP and locking it for three years.

This move aims to reduce circulating supply, potentially driving up the token’s value. With buybacks set to begin on the 17th of February, investors are closely watching how the market will react.

Market reaction and price outlook

Following the announcement, JUP showed a notable uptick, climbing 8.82% to trade around $0.9255, at press time.

A look at the price chart revealed that JUP attempted to reclaim key resistance levels, with the 50-day Moving Average (MA) at $0.8951 and the 200-day MA at $0.9203. 

A sustained breakout above the 200-day MA could indicate bullish momentum, setting the stage for a potential rally.

Additionally, the Relative Strength Index (RSI)was at 52.07, suggesting neutral momentum.

If buying pressure increases, the RSI could push toward overbought levels, further reinforcing a bullish scenario.

JUP trading volume and on-chain activity

JUP’s trading volume spiked following the buyback announcement, reflecting heightened investor interest. Data from DeFiLlama showed a sharp increase in protocol fees, directly impacting buyback allocations. 

Over the past few weeks, protocol fees have surged dramatically, reaching peaks of over $600K per day, compared to significantly lower levels in the preceding months.

This rapid increase suggests growing user activity and revenue generation, strengthening the sustainability of the buyback mechanism.

Additionally, JUP’s Total Value Locked [TVL] was around $2.7 billion as of this writing, indicating strong market confidence in the protocol.

A higher TVL reflects greater liquidity and ecosystem growth, which could reinforce the positive impact of the buyback strategy over time.

Potential scenarios for JUP

If JUP successfully breaks past the $1.00 psychological barrier, it could test further resistance levels around $1.10 and $1.20.

However, failure to sustain momentum may lead to a retest of the $0.85 support zone, where buyers previously stepped in.

JUP could experience gradual upward pressure as the buyback mechanism reduces available supply.

Still, market sentiment and broader crypto trends will be crucial in determining long-term price action. Investors will keenly observe how the buybacks influence liquidity and overall demand in the coming weeks.