STEPN rebounds sharply after falling 80% in a month — is GMT price bottoming out?

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A large downtrend within the STEPN (GMT) costs witnessed within the final 30 days seems to be nearing exhaustion.

GMT’s price has rebounded by practically 35%—from $0.80 on Might 27 to $0.99 on Might 28. Apparently, the upside retracement began after the value fell in the identical vary, which had acted as assist earlier than GMT’s 500% and 120% worth rallies in March and early Might, respectively.

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GMT/USD every day worth chart. Supply: TradingView

Moreover, the rebound additional preceded an 80% drop from its document excessive of $4.50, established on April 27, which left GMT oversold, per its every day relative power index studying that slipped under the oversold threshold of 30 on Might 26.

The technical assist, along with oversold RSI, suggests GMT is within the means of bottoming out.

GMT worth ranges to observe

Drawing a Fibonacci retracement graph from GMT’s $0.0099-swing low to $3.82-swing excessive leaves the token inside a broader consolidation vary, outlined by the 0.382 Fib line (close to $1.50) appearing as interim resistance and the 0.786 Fib line (close to $0.82) serving as interim assist.

GMT/USD every day worth chart that includes Fib assist/resistance ranges. Supply: TradingView

Due to this fact, an prolonged rebound transfer from the $0.82-support degree brings $1.50 into the eye as the following upside goal, up about 40% from immediately’s worth. Furthermore, a robust upside follow-up may ship the STEPN token in the direction of the $2-2.50 space, suggesting that the market has bottomed out.

Conversely, a weaker upside follow-up may have GMT’s worth retest $0.82 for a breakdown transfer towards $0.54. This degree was instrumental in capping the token’s draw back makes an attempt between March 17 and March 21 earlier this yr.

STEPN a “hype-driven speculative frenzy?”

From the elemental perspective, GMT’s bias appears to be like skewed to the draw back.

First, the token continues to commerce in near-perfect tandem with Bitcoin (BTC) and the opposite top-cap cryptocurrencies, in keeping with their every day correlation coefficient readings, which topped 0.98 on Might 21, however had subsided to 0.75 on Might 28.

GMT/USD and BTC/USD every day correlation coefficient. Supply: TradingView

So, if Bitcoin continues to struggle below $30,000, as many analysts consider, it may take GMT decrease alongside as a consequence of its constant constructive correlation with the token.

Second, GMT may drop as a result of rising uncertainties surrounding STEPN’s business model, which includes paying customers for exercising both by strolling, jogging, or working with the native Inexperienced Satoshi Token (GST) items.

Mike Fay, an impartial market analyst and the writer of the Heretic Speculator monetary e-newsletter, says that STEPN’s so-called move-to-earn mannequin is neither scalable nor sustainable in the long run.

The analyst cited some core points with the “way of life app.”

First, STEPN has a large entry barrier for it makes folks purchase its costly “Sneaker NFTs.” However even then, folks purchase these digital points for tons of or 1000’s of {dollars} in anticipation that they might get better their investments by incomes and selling GST tokens.

Many customers have already recouped their cash, resembling YouTuber Sebbyverse, who claims that he earned $219 value of GST tokens simply by strolling quarter-hour to-and-fro for dinner. 

Associated: People want to be paid crypto to exercise in the Metaverse: Survey

“The way in which this probably ends is with the final individuals who come into the platform basically serving as ‘exit liquidity’ for the early adopters when the app’s in-game fee token (GST-USD) collapses,” Fay stated whereas highlighting that the STEPN’s in-house token is already crashing. 

GST/USD every day worth chart. Supply: TradingView

That may harm customers’ return on funding who paid 1000’s of {dollars} for Sneaker NFTs. So, if the demand for NFTs dries up and incentive drops, STEPN would have hassle attracting new gamers to its app, thus dampening demand for GMT, in keeping with Fay. He added:

“STEPN is in a hype-driven speculative frenzy and I am not touching any of this. Not the payout token (GST-USD), the governance token GMT, or the NFTs.”

The views and opinions expressed listed here are solely these of the writer and don’t essentially mirror the views of Cointelegraph.com. Each funding and buying and selling transfer includes threat, you need to conduct your individual analysis when making a choice.