Meme stock GME makes a comeback, BTC earnings are beaten again

Original title: "Meme stock GME makes a comeback, BTC earnings are "beaten" again"

Original author: Mary Liu, BitpushNews

 

Since the BTC halving, the crypto market has continued to fluctuate, and the market has been in consolidation mode for the past two and a half months. According to Bitpush data, Bitcoin retreated from Monday's gains, hitting a low of $61,045 during the midday session on Tuesday, and was trading at $61,590 at press time, down 2.4% in 24 hours.

 

Despite the sideways movement of the crypto market, the meme stock craze has made a comeback after Keith Gill (Roaring Kitten), the "leader" of the US retail investor speculation GameStop, returned to the X platform after three years. The price of GameStop (GME) soared 60% on Tuesday after rising 74% on Monday.

 

In addition to GameStop's gains, theater chain operator AMC's stock price rose more than 100%, SunPower (SPWR) rose 90%, Beyond Meat (BYND) rose 25%, and Children's Place rose 6%. As of the close of the day, the SP, Dow Jones and Nasdaq indexes were all higher, up 0.48%, 0.32% and 0.75%, respectively.

 

On the yearly chart, GameStop stock has returned more than 154%, while Bitcoin's annual return is around 129%, and most of GameStop's gains have come in the past two days, easily outperforming BTC, according to TradingView.

 

 

Kitten was the leading figure in the GameStop saga during the COVID-19 pandemic, with retail enthusiasm driving GameStop’s monthly gains to over 1,000%. In the 24 hours after Roaring Kitten’s return to X, GameStop’s stock price rose 111%, while Dogecoin and SHIB rose 6.2% and 5.4% respectively during the same period. On May 13, the day after Keith Gill returned to social media, PEPE hit an all-time high of more than $0.000010.

 

Can the trend in 2021 be repeated?

 

Some Wall Street strategists say this new outbreak is far from the frenzy of three years ago, and the current market trend is still a far cry from the retail inflow levels of 2021.

 

GameStop saw net inflows of $15.8 million on Monday, while AMC attracted $37.5 million, according to VandaTrack data. In January 2021, GameStop and AMC saw peak single-day inflows of $87.5 million and $170 million, respectively.

 

 

"Both stocks saw a surge in inflows, but their size is still a fraction of what we saw in early 2021," Marco Iachini, senior vice president of Vanda Research, wrote in a research note on Tuesday.

 

Nicholas Colas, co-founder of DataTrek, pointed out the difference between this meme market moment and 2021 in a note to clients on Tuesday.

 

Colas said: "At that time, retail traders stayed at home and had nothing to do except trading stocks. The U.S. federal government not only airdropped trillions of stimulus funds. Yes, we are sure that we will hear more about meme stocks in the coming weeks, but it will not be as enthusiastic as three years ago."

 

Will GameStop spawn this year's alt season?

 

In the 2021 cycle, the GameStop short squeeze triggered a rebound in altcoins shortly after, and the legendary return of GameStop ignited new hope for altcoins.

 

According to a May 14 post by cryptocurrency analyst CryptoAmsterdam, the 2021 altcoin rally was catalyzed immediately after the GameStop rally, based on historical chart patterns:

 

 

“The blue on the left is the 2021 GME run and top. The blue on the right is what happened to altcoins after that event. Money is always flowing,” the analyst said.

 

CryptoAmsterdam noted in a subsequent post by X that the current market cap of altcoins is also similar to the situation that catalyzed the altcoin bull cycle in 2021, citing the following chart.

 

 

However, the investment environment is different today, and eToro market analyst Josh Gilbert said that short positions on GameStop are much smaller than in 2021, which may greatly curb the "size of the rise."

 

Josh Gilbert analyzed: "The current environment is not comparable to 2021, when interest rates were at their lowest levels, governments provided fiscal stimulus around the world, and there was almost no inflation in major economies around the world."

 

Inflation hinders the rise of risky assets

 

The latest producer price index (PPI) released by the United States on Tuesday showed that wholesale prices rose 0.5% month-on-month in April, higher than the market's expectation of 0.3%. Inflation concerns continue to seriously affect risky asset prices. This is the latest data point showing that inflation is still far above the Federal Reserve's 2% target, indicating that interest rates will continue to remain at a higher level for a longer period of time as the US central bank tries to slow the rise in the cost of living.

 

Secure Digital Markets said that while meme stocks and token prices soared, U.S. stock index futures fell after the unexpectedly high producer price index (PPI) in April, undermining the Federal Reserve's hopes of cutting interest rates later this year amid weak inflation.

 

Secure Digital Markets analysts said: "If the Fed does not cut interest rates early, investors may need to go through a relatively calm period. For Bitcoin, the next market shock is not far away."

 

 

MN Trading founder Michaël van de Poppe believes that as long as Bitcoin bulls can hold $60,500, the next upper resistance level is $63,000. But if the support level of $60,500 is broken, BTC may fall to the support level between $52,000 and $55,000.

 

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