Bitcoin Price Outlook: Will GameStop stock resurgence have downstream effect on BTC and alts?
- Bitcoin price defends support due to ascending trendline as BTC bulls hold above $61,000.
- GameStop stock shapes and accelerates markets for two days after Roaring Kitty’s surprise resurfacing.
- GME could generate renewed appetite for risk/hype among speculators seeking opportunities, potentially causing downstream effects on BTC and alts.
Bitcoin (BTC) price continues to glide along an ascending trendline on the four-hour time frame. Meanwhile, the GameStop saga that has resurfaced after three years distracts the market, with speculation that it could inspire risk appetite among traders and investors.
Also Read: GameStop shorts lose over $1 billion in mark-to-market losses on Monday amid meme-stocks demand
Daily digest market movers: Will GameStop stock resurgence have downstream effect on Bitcoin and alts?
Bitcoin price action remains inspiring this week, with analysts anticipating a bullish turnaround across the market. Meanwhile, the markets are engorged on the GameStop stock narrative, following the resurfacing of Keith Gill, alias Roaring Kitty.
Speculation has it that the GameStock resurgence could generate a renewed appetite for risk as well as hype among traders and investors who are looking for opportunities. If it happens, @KevinSvenson_ on X says, “this will probably have a downstream effect, resulting in a surge across many high-risk speculative markets, including Bitcoin and altcoins.”
In hindsight, the last time GameStock’s GME stock rallied by over 100% in a day was in January 2021. When it happened, Bitcoin price was down 30% after recently breaking its previous cycle all-time high (ATH).
As it stands, Bitcoin price is down 25% in May 2024 after breaking its previous cycle ATH recorded in March. As if to repeat the 2021 scenario, GME is up by more than 100% in a day, blowing shorts out of the water.
Are we back in January 2021 again?
— Dr. Evil of CryptoⒷ (@DrEvilofCrypto) May 13, 2024
January 2021: #Bitcoin down 30% after recently breaking previous cycle ATH. $GME up over 100% in a day, crushing shorts and starting its rally to over $100.
May 2024: #Bitcoin down 25% after recently breaking previous cycle ATH. $GME up… pic.twitter.com/ZtzaGRrwLU
If history rhymes, Bitcoin could rally over the coming months, potentially reaching $120,000 by August. Meanwhile, reports indicate that GameStock stock trading has been halted, with shorts down another $-1.36 billion in mark-to-market losses on Tuesday.
$GME SHORTS ARE DOWN ANOTHER -$1.36 BILLION IN MARK-TO-MARKET LOSSES TODAY - S3PARTNERS
— *Walter Bloomberg (@DeItaone) May 14, 2024
The halt comes amid heightened price volatility with AMC suffering a similar fate. To put it in perspective, GameStop GME surged 120% in the premarket to $67. Eric Balchunas has reported that GME traded $4 billion worth of volume in the first 30 minutes of trading, surpassing Tesla and Apple.
Cryptocurrency metrics FAQs
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
Technical analysis: Bitcoin coils up for a bounce, but there is a catch
Bitcoin price is primed for a bounce as it defends against further downside, shown by the Relative Strength Index (RSI), which is deviating horizontally. If this momentum indicator defends against a lower high, Bitcoin price could bounce atop the ascending trendline, potentially recapturing the $63,354 threshold.
However, only a flip of the $65,500 blockade and a stable close above it on the four-hour time frame would signify a change in market structure. This could precipitate an extended move north with BTC likely to take back the $70,000 psychological level.
In a highly bullish case, Bitcoin price could extend its neck high enough to take back its all-time high at $73,777 before setting a new peak price.
BTC/USDT 4-hour chart
Conversely, if seller momentum increases and the ascending trendline fails to hold as a support floor, Bitcoin price could drop to the $60,630 buyer congestion level. Enhanced selling pressure could see Bitcoin price roll over to the $60,000 psychological level.
A decisive close of the RSI below the mean level of 50 and the Awesome Oscillator (AO) flashing red tilts the odds in favor of the downside. A lower low on the RSI, however, is likely to encourage more sell orders.
Author
Lockridge Okoth
FXStreet
Lockridge is a believer in the transformative power of crypto and the blockchain industry.
