Will GameStop stock resurgence have downstream effect on BTC and alts?

• Bitcoin price defends support due to ascending trendline as BTC bulls hold above $61,000.
• GameStop stock shapes and accelerates markets for two days after Roaring Kitty’s surprise resurfacing.
• GME could generate renewed appetite for risk/hype among speculators seeking opportunities, potentially causing downstream effects on BTC and alts.

Bitcoin (BTC) price continues to glide along an ascending trendline on the four-hour time frame. Meanwhile, the GameStop saga that has resurfaced after three years distracts the market, with speculation that it could inspire risk appetite among traders and investors.

Also Read: GameStop shorts lose over $1 billion in mark-to-market losses on Monday amid meme-stocks demand

Daily digest market movers: Will GameStop stock resurgence have downstream effect on Bitcoin and alts?

Bitcoin price action remains inspiring this week, with analysts anticipating a bullish turnaround across the market. Meanwhile, the markets are engorged on the GameStop stock narrative, following the resurfacing of Keith Gill, alias Roaring Kitty.

Speculation has it that the GameStock resurgence could generate a renewed appetite for risk as well as hype among traders and investors who are looking for opportunities. If it happens, @KevinSvenson_ on X says, “this will probably have a downstream effect, resulting in a surge across many high-risk speculative markets, including Bitcoin and altcoins.”

In hindsight, the last time GameStock’s GME stock rallied by over 100% in a day was in January 2021. When it happened, Bitcoin price was down 30% after recently breaking its previous cycle all-time high (ATH).

As it stands, Bitcoin price is down 25% in May 2024 after breaking its previous cycle ATH recorded in March. As if to repeat the 2021 scenario, GME is up by more than 100% in a day, blowing shorts out of the water.

If history rhymes, Bitcoin could rally over the coming months, potentially reaching $120,000 by August. Meanwhile, reports indicate that GameStock stock trading has been halted, with shorts down another $-1.36 billion in mark-to-market losses on Tuesday.

The halt comes amid heightened price volatility with AMC suffering a similar fate. To put it in perspective, GameStop GME surged 120% in the premarket to $67. Eric Balchunas has reported that GME traded $4 billion worth of volume in the first 30 minutes of trading, surpassing Tesla and Apple.

Technical analysis: Bitcoin coils up for a bounce, but there is a catch

Bitcoin price is primed for a bounce as it defends against further downside, shown by the Relative Strength Index (RSI), which is deviating horizontally. If this momentum indicator defends against a lower high, Bitcoin price could bounce atop the ascending trendline, potentially recapturing the $63,354 threshold.

However, only a flip of the $65,500 blockade and a stable close above it on the four-hour time frame would signify a change in market structure. This could precipitate an extended move north with BTC likely to take back the $70,000 psychological level.

In a highly bullish case, Bitcoin price could extend its neck high enough to take back its all-time high at $73,777 before setting a new peak price.

BTC/USDT 4-hour chart

Conversely, if seller momentum increases and the ascending trendline fails to hold as a support floor, Bitcoin price could drop to the $60,630 buyer congestion level. Enhanced selling pressure could see Bitcoin price roll over to the $60,000 psychological level.

A decisive close of the RSI below the mean level of 50 and the Awesome Oscillator (AO) flashing red tilts the odds in favor of the downside. A lower low on the RSI, however, is likely to encourage more sell orders.