Tuesday, November 29, 2022

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


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

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

GMT/USD every day price chart. Source: TradingView

Additionally, 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 May 26.

The technical help, in addition to oversold RSI, suggests GMT is in the method of bottoming out.

GMT price 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 price chart that includes Fib help/resistance ranges. Source: TradingView

Therefore, 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 as we speak’s price. Moreover, a sturdy 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 price 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 12 months.

STEPN a “hype-driven speculative frenzy?”

From the elemental perspective, GMT’s bias seems to be 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 response to their every day correlation coefficient readings, which topped 0.98 on May 21, however had subsided to 0.75 on May 28.

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

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

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

Mike Fay, an unbiased market analyst and the creator of the Heretic Speculator monetary publication, 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.” But even then, folks 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, resembling YouTuber Sebbyverse, who claims that he earned $219 price of GST tokens simply by strolling quarter-hour to-and-fro for dinner. 

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

“The manner 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 price chart. Source: TradingView

That would 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 bother attracting new gamers to its app, thus dampening demand for GMT, in response to Fay. He added:

“STEPN is in a hype-driven speculative frenzy and I’m 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. Every funding and buying and selling transfer includes danger, you need to conduct your individual analysis when making a determination.