Solana-based GME coin (GME), a memecoin paying tribute to the 2021 short squeeze of GameStop and not to be confused with GME stock, has surged by over 150% in the past 24 hours to reach $0.029 on June 7.
Interestingly, the price exploded after Keith Gill, also known as Roaring Kitty, announced his return to YouTube on June 7 after a three-year hiatus.
GME memecoin soars 750% in one week
Gill was a central figure in the original GameStop short squeeze saga of 2021, and his recent online activity has rekindled interest in GameStop-related investments. For instance, GME crypto prices have surged by over 730% since June 2, when Gill revealed that he has started trading the shares of the original GameStop videogame retailer again.
The stock value of those shares have also surged after Gill's revelation, up by over 110% since June 2.
Keith Gill’s YouTube announcemnet lacked specific details on his discussion topics or whether he plans to disclose new investment positions. Nonetheless, it has ignited widespread speculation about him being bullish on the GameStop stock.
The anticipation surrounding Gill's return has raised excitement within the investor community. For instance, a trader made $1.5 million by investing $2 million worth of Solana's native token SOL into the GME memecoin.
Related: Roaring Kitty’s $300M GME position sparks market manipulation claims
Gill's livestream is scheduled to begin at noon New York Time. It could further influence the market sentiment toward GameStop shares and its copycat crypto tokens.
Sell-the-news?
GME coin remains at risk of facing massive price corrections in the coming days, primarily after Gill concludes his YouTube livestream.
The "sell the news" phenomenon is common in financial markets, where prices rise in anticipation of a major event and then drop sharply once the event has passed. Investors often buy in on the expectation of positive news and then sell off their positions to lock in profits once the news is released, leading to a sudden decrease in price.
For instance, in May 2021, the price of Dogecoin (DOGE) crashed 25% minutes after its biggest proponent, Elon Musk, mentioned it on Saturday Night Live. The original memecoin had reached an all-time high an hour before the show.
GME technical analysis for June
From a technical perspective, Solana’s GME token has reached a daily relative strength index (RSI) of approximately 82, indicating overbought conditions.
This heightened RSI level suggests that the token may face strong corrections in the coming days as the market reacts to the overextended price surge, akin to its 80% price correction in May.
In addition, GME is forming a bearish divergence between its rising price and falling RSI momentum on the daily chart, indicating buying exhaustion among its bullish traders. This further increases the Solana memecoin’s price correction prospects.
Should a pullback occur, GME's immediate downside target for June is around $0.228, aligning with the 1.618 Fibonacci retracement level.
However, if the cryptocurrency experiences a more significant correction like in May, its primary downside target could be its 50-day exponential moving average (50-day EMA, the red wave) at approximately $0.005, down 80% from the current price level.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.