Will the comeback of GameStop lead to this year's alt season?

Original article by Mary Liu, BitpushNews

Since BTC Halving encryption market has continued to Fluctuation, and the market has been in consolidation mode for the past two and a half months. Bitcoin retreated from Monday’s pump, hitting a low of $61, 045 in Tuesday’s midday session, and trading at $61, 590 at press time, down 2.4% in 24 fall hours, the data showed.

Although the encryption market is sideways, the price of GameStop (GME) surged 60% on Tuesday after US retail investors pumped GameStop’s “big brother” Keith Gill (Roaring Kitten) to return to the X platform after three years.

In addition to GameStop’s pump, cinema chain operator AMC shares pumped more than 100%, SunPower (SPWR) pumped 90%, Beyond Meat (BYND) pumped 25% and Children’s Place pumped 6%. By the end of the day, the S&P, Dow Jones and Nasdaq were all pump, pump 0.48%, 0.32% and 0.75%, respectively.

According to TradingView, on the yearly chart, GameStop stock has returned more than 154%, Bitcoin has returned around 129% year-over-year, and most of GameStop’s pump has come from the last two days, with gains easily exceeding BTC.

During the COVID-19 pandemic, Kitten was a leading figure in the GameStop saga, with a retail investor boom driving GameStop monthly pump by more than 1, 000%. Within 24 hours of Roaring Kitten’s return to X, GameStop’s stock price pump up 111%, while DOGE (Dogecoin) and SHIB pump 6.2% and 5.4%, respectively, over the same period. On May 13, the day after Keith Gill returned to social media, PEPE hit an all-time high above $0.000010.

Can the 2021 trend be repeated?

Some Wall Street strategists say this new outbreak is nowhere near as mad as it was three years ago, and that the current stage of the market is still far from the level of retail inflows in 2021.

According to VandaTrack, GameStop had a net inflow of $15.8 million on Monday, while AMC attracted $37.5 million. In January 2021, GameStop and AMC peaked at $87.5 million and $170 million, respectively.

Marco Iachini, senior vice president at Vanda Research, wrote in a research note on Tuesday that “both stocks saw a surge in inflows, but they were still a fraction of what we saw at the beginning of 2021.”

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

Colas said: “Back then, retail traders were at home with nothing to do but trade stocks, and the U.S. federal government not only Airdropped trillions of stimulus dollars. Yes, we’re sure we’ll hear more long about meme stocks in the coming weeks, but not as enthusiastically as we were three years ago.”

Will GameStop give rise to this year’s alt season?

In the 2021 cycle, GameStop sparked alts Rebound shortly after its short squeeze, and the return of the GameStop saga ignited new hope for alts.

According to a May 14 post by Crypto Assets analyst CryptoAmsterdam, according to historical chart patterns, the 2021 alts Rebound was catalyzed immediately after the GameStop Rebound:

“The blue on the left is the pump and top of the 2021 GME,” the analyst said. The blue on the right is what happened to the alt after the event. Money is always flowing."

In a subsequent X post, CryptoAmsterdam noted that alts current market capitalization is also similar to the situation of the 2021 catalytic alts Bull Market cycle, citing the chart below.

However, today’s investment climate is different, with eToro market analyst Josh Gilbert saying that short positions on GameStop are long smaller compared to 2021, which could significantly dampen the “size of the pump.”

“The environment is not comparable to 2021, when Intrerest Rates were at their lowest, governments provided fiscal stimulus globally, and there was little Inflation in the world’s major economies,” Josh Gilbert analyzed.

Inflation prevents risk assets from pumping

The latest U.S. producer price index (PPI) released on Tuesday showed wholesale prices pump 0.5% month-on-month in April, higher than market expectations of 0.3%, inflation concerns continue to weigh heavily on risk asset prices, the latest data point showing that inflation remains well above the Federal Reserve’s 2% target, suggesting that Intrerest Rate will continue to remain elevated for longer as U.S. Central Bank try to slow the rise of the cost of living.

While meme stocks and token prices soared, U.S. stock index futures falls after an unexpectedly high producer price index (PPI) in April, dampening hopes of a Fed rate cut later this year amid weaker inflation, Secure Digital Markets said.

Analysts at Secure Digital Markets said: “If the Fed does not cut interest rates early, investors may need to go through a period of relative calm, and for Bitcoin, the next market shock is not far away.”

Michaël van de Poppe, founder of MN Trading, believes that as long as the Bitcoin long can hold on to $60, 500, the next resistance level above will be $63, 000. But if it falls below the $60, 500 support level, BTC could fall to the support level between $52, 000 and $55, 000.