GMT is booming despite warnings that its 38,000% price hike since inception could end up being an ‘absolute joke’.
STEPN (GMT) has risen strongly against the US Dollar this week, and it looks set to form a classic bullish technical pattern called a “bull flag”.
GMT price is up 30% so far this week, including a strong rally to set an all-time high near $3.85, followed by a relatively modest correction to almost $3. Notably, the correction phase occurred within a descending parallel channel, which increases the chances that the price will end up breaking to the upside.
That is precisely because traditional analysts consider strong rallies, followed by range-bound price corrections, to be bullish continuation setups. In addition, the one that GMT has been painting – a bullish flag, as mentioned above – could lead to a bull run in the coming weeks.
GMT Aims Higher
As a rule, traders make a bull flag target by measuring the height of the previous uptrend and projecting it from the breakout point. Applying the classic setup on the GMT chart, we see that it is now targeting a rally above $5, roughly 65% above the current price.
The success rate for bull flags to hit their bullish targets is around 64%, according to Thomas Bulkowski, a veteran investor and analyst.
However, the risk of a drop to $2 is high if GMT price breaks below the lower trend line of the bull flag, the last support line, which coincides with the 50-4H exponential moving average (50-4H EMA; the red wave) at $2.91.
Is STEPN’s 38,000% profit an “absolute joke”?
The GMT token has risen nearly 38,000% in less than two months, amid hype over STEPN’s “move-to-earn” economic model, which rewards users of its app with a native currency, called Green Satoshi Token (GST), for the mere fact of moving.
STEPN generates revenue (earned $26.81 million in Q1 2022) through the sale of its so-called “NFT Sneaker”, a unique digital image whose ownership allows players to earn GST in the first place. The game uses revenue first to buy and then burn GMT, thus creating upward pressure on its prices if the demand for the token increases.
Independent market analyst Wangarian believes the hype around STEPN resembles what Axie Infinity (AXS), a game-to-win metaverse, witnessed in May 2021. The AXS/USD pair soared from around $2.50 to about USD 178 between May and November last year.
On Twitter, Wangarian posted that, “Tell me how $APE + $GMT ripping in a sideways market doesn’t look similar to $AXS back in May 2021”.
Independent market analyst Michaël van de Poppe, however, fears that GMT’s market capitalization, which stands at around $1.9bn – with a fully diluted valuation of around $18bn is an “absolute joke”. However, he adds on a Twitter post that this fact “tells a lot: – The potential of the markets is insane and we’re still early; – Marketing is doing its thing in #crypto all over again; and – Valuations can still become ridiculous.”
Nevertheless, “GMT valuations can still be ridiculous,” he adds, due to STEPN’s marketing tactics.
By Audy Castaneda
