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

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An enormous 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 Could 27 to $0.99 on Could 28. Curiously, the upside retracement began after the worth fell in the identical vary, which had acted as help earlier than GMT’s 500% and 120% value rallies in March and early Could, respectively.

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GMT/USD every day value chart. Supply: TradingView

Moreover, the rebound additional preceded an 80% drop from its file 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 Could 26.

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

GMT value 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) performing as interim resistance and the 0.786 Fib line (close to $0.82) serving as interim help.

GMT/USD every day value chart that includes Fib help/resistance ranges. Supply: TradingView

Subsequently, an prolonged rebound transfer from the $0.82-support degree brings $1.50 into the eye as the subsequent upside goal, up about 40% from at this time’s value. Furthermore, a robust upside follow-up might ship the STEPN token in direction of the $2-2.50 space, suggesting that the market has bottomed out.

Conversely, a weaker upside follow-up might have GMT’s value 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 basic 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, based on their every day correlation coefficient readings, which topped 0.98 on Could 21, however had subsided to 0.75 on Could 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 might take GMT decrease alongside as a consequence of its constant optimistic correlation with the token.

Second, GMT might 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) models.

Mike Fay, an impartial market analyst and the creator 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 an enormous entry barrier for it makes individuals purchase its costly “Sneaker NFTs.” However even then, individuals purchase these digital points for a whole lot or hundreds of {dollars} in anticipation that they’d get better their investments by incomes and selling GST tokens.

Many customers have already recouped their cash, equivalent to 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 best way this doubtless ends is with the final individuals who come into the platform primarily 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 value chart. Supply: TradingView

That will damage customers’ return on funding who paid hundreds 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, based on 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 below are solely these of the creator and don’t essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer includes danger, you need to conduct your personal analysis when making a choice.