- How much does GME’s rally and social volume correlate with Bitcoin price trends?
- The same impact was seen at higher periods during the previous cycle.
Bitcoin (BTC) broke above short-term local resistance at $64.5,000 on May 15, just two days after GameStop (GME) posted a measured 284% rally since last Friday. According to a recent post by X (formerly Twitter): st tly It was claimed that the GME craze has actually spread to cryptocurrencies.
Given the speculative nature of the cryptocurrency market, especially the memecoin sector, this overlap makes sense. To see if crowd sentiment could mark the peaks and troughs of a cycle, AMBCrypto searched for more similarities.
Short-term peaks and troughs coincide with increased social activity
Source: Santiment on X
In the short term, GME/AMC social mentions have marked Bitcoin’s highs and lows over the past three days. However, these social trends may not portend a change in trends. It’s more likely that it just matched them.
May 13th was the Monday after the weekend Roaring Kitty ended her three-year hibernation as a meme on X (formerly Twitter). On May 15, the consumer price index and price index were also released, and came out at lower levels than expected. This led to a greater tendency to take risks among participants.
Source: Santiment
GameStop’s social volume was incredibly high in January and November 2021. In January 2021, the price of Bitcoin resumed a vigorous rally after just recovering from a deep retracement to $31,000.
On the other hand, the social volume surge in November 2021 marked a record high for the cryptocurrency, and BTC prices soon began to fall. So even if the recent correlations have an explanation, Santiment’s recent observations may have some substance.
Traders and investors may want to keep an eye on these indicators going forward.
What is the market capitalization of the altcoin market?
Source: TOTAL.3 on TradingView
The surge in GME social volume in January and November 2021 coincided with the rise and highs of Bitcoin as well as the market capitalization of the altcoin market. But that wasn’t the case in May 2024. In fact, altcoin market capitalization has been expanding since October 2023.
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In conclusion, the relationship appears to have something to do with the surge in GME social activity reinforcing the prevailing bullish trend in the cryptocurrency market. But they don’t necessarily manufacture it.