GameStop (GME) Memecoin Risks 80% Crash After Keith Gill’s YouTube Livestream

Solana’s GameStop (GME) token is flashing warning signs of a possible price correction after the much-publicized YouTube Livestream by Keith Gill, the mastermind of the notorious GameStock short squeeze of 2021. Let’s discuss the major reasons behind the bearish outlook in detail.

GME Token Technical Analysis for June: Bearish Divergence, Overbought RSI Could Spark Major Selloff

As of June 7, GameStop crypto’s daily Relative Strength Index (RSI) readings were around 82, signaling extremely overbought conditions. An overbought RSI often suggests an imminent price correction as the market adjusts from an overextended surge.

Moreover, the GME token displays a bearish divergence on its daily chart, with the price forming higher highs against the lower high of its RSI, indicating that traders’ buying enthusiasm may wane in the coming days.

If a pullback occurs, GME’s immediate downside target is around $0.228, corresponding to the 1.618 Fibonacci retracement level. A more substantial correction could see the token dropping to its 50-day exponential moving average (50-day EMA) at approximately $0.005, representing an 80% decline from its current price.

GME Memecoin Surge Driven by Keith Gill’s Return

The bearish outlook for GME token follows a 170% price jump in the last 24 hours to reach an all-time high of 0.032 on June 7. This Solana memecoin surge can be largely attributed to Gill announcing his return to YouTube on June 7, 1200 New York Time, after a three-year hiatus. In doing so, the meme stock investor has reignited interest in GameStop-related investments through his renewed online presence.

For instance, since Gill’s announcement on June 2 that he has resumed trading shares of the original GameStop video gaming retailer, GME crypto prices have skyrocketed by over 800%.

Meanwhile, GameStop shares have surged by over 110% in value since June 2.

Gill’s YouTube announcement lacked specific details on his future discussion topics or investment positions, but it has sparked widespread speculation about his bullish outlook on GameStop stock. In turn, copycat GameStop cryptocurrencies are booming.

The buzz around his return has fueled investor excitement, with notable instances such as a trader earning $1.5 million by investing $2 million worth of Solana’s native token SOL into the GME memecoin.

That Elon Musk Connection

GME memecoin investors should be cautious of the “sell-the-news” phenomenon after Gill concludes its YouTube Livestream.

Sell-The-News is common in financial markets where prices spike in anticipation of significant events and then plummet once the event has passed. This phenomenon happens as investors buy in expecting positive news and subsequently sell their positions to lock in profits post-announcement, leading to a sharp price drop.

A pertinent example of this is the May 2021 crash of Dogecoin (DOGE), which fell by 25% minutes after its primary advocate, Elon Musk, mentioned it on Saturday Night Live. Dogecoin had reached an all-time high just an hour before the show.

Given these patterns, the GME coin risks experiencing significant price corrections in the coming days.