STEPN rebounds sharply after falling 80% in a month – did GMT prices bottom out?

The sharp decline in STEPN (GMT) prices witnessed over the past 30 days appears to be close to drying up.

Prices in GMT It rebounded nearly 35% – from $0.80 on May 27 to $0.99 on May 28. Interestingly, the upside retracement started after prices fell into the same range, which acted as support before price rallies at 500% and 120% GMT in March, and early May, respectively.

GMT/USD daily price chart. Source: TradingView

Moreover, the rally further contributed to oversold GMT, before falling 80% from its all-time high of $4.50 set on April 27, falling below the May 26 oversold threshold of 30, according to its daily RSI reading.

In addition to the oversold RSI, technical support suggests that GMT is bottoming out.

GMT price levels to watch

A Fibonacci retracement chart from a swing low of $0.0099 GMT to a swing high of $3.82 puts the coin in a broader consolidation range by the 0.382 Fibonacci line (near $1.50) ) as interim resistance and the 0.786 Fibonacci line (near $0.82) defines interim support.

GMT/USD daily price chart with Fibonacci support/resistance levels. Source: TradingView

As such, a rebound extending from the $0.82 support puts $1.50 in focus as the next upside target, up about 40% from today’s price. Furthermore, a strong upside follow-through could push STEPN token towards the $2-2.50 area, which would suggest that the market has bottomed.

Conversely, a weaker upside follow-through could see the price retest $0.82 GMT to $0.54. This level helped limit downside attempts by the coin between March 17 and March 21 earlier this year.

STEPN A “hype-driven speculative frenzy”?

From a fundamental perspective, the GMT bias appears to be skewed to the downside.

First, the coin continues to trade in near-perfect sync with Bitcoin (bitcoin) and other top cryptocurrencies, according to their daily correlation coefficient readings, topped 0.98 on May 21, but fell back to 0.75 on May 28.

GMT/USD and BTC/USD daily correlation coefficients. Source: TradingView

So, if Bitcoin continues struggling under $30,000, As many analysts believe, since it has always been positively correlated with the coin, it may lower GMT at the same time.

Second, GMT may fall due to rising uncertainty around it STEPN’s business modelwhich includes paying users to exercise by walking, jogging, or running with native Green Satoshi Token (GST) units.

Mike Fay, an independent market analyst and author of the Heretic Speculator financial newsletter, said STEPN’s so-called profit model is neither scalable nor sustainable in the long run.

analyst quote Some core issues with “lifestyle apps”.

First of all, STEPN has a huge barrier to entry as it gives people access to its expensive “Sneaker NFT”. But even then, people buy these digital problems for hundreds or thousands of dollars in hopes of getting their investment back by earning and recouping it. Sale of GST tokens.

Many users have gotten their money back, such as YouTuber Sebbyverse, who claim He only needs to walk back and forth for 15 minutes to earn $219 worth of GST tokens.

related: People Want Crypto to Work Out in the Metaverse: Survey

“The way this could end up is when the app’s in-game payment token (GST-USD) crashes, the last people on the platform essentially act as ‘exit liquidity’ for early adopters,” Fay said, while stressing STEPN’s internal token has collapsed.

GST/USD daily price chart. Source: TradingView

This will hurt the return on investment of users who pay thousands of dollars for Sneaker NFTs. As such, Fay said, if demand for NFTs dries up and incentives drop, STEPN will struggle to attract new players to its app, dampening demand for GMTs. He added:

“STEPN is in a hype-driven speculative frenzy, and I haven’t touched any of that. Not a payment token (GST-USD), a governance token GMT, or NFTs.”

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk and you should do your own research when making a decision.