Crypto markets have been volatile since the Bitcoin (BTC) halving, and have been in a consolidation phase for the past two and a half months. Bitcoin hit a low of $61,045 midday on Tuesday, down 2.4% in 24 hours.
Despite the sideways movement of crypto markets, GameStop (GME) has seen a resurgence in meme stocks after Keith Gill (Roaring Kitten) returned to social media. GameStop surged 60% on Tuesday after rising 74% on Monday. In addition, AMC shares rose more than 100%, SunPower (SPWR) rose 90%, Beyond Meat (BYND) rose 25%, and Children's Place rose 6%. The S&P, Dow Jones and Nasdaq rose 0.48%, 0.32% and 0.75%, respectively.
TradingView data shows that GameStop's annual return is more than 154%, while Bitcoin is about 129%. Within 24 hours of Roaring Kitten's return, GameStop shares rose 111%, while Dogecoin and SHIB rose 6.2% and 5.4%, respectively.
Although market sentiment is high, Wall Street strategists believe that the current outbreak is far less than the madness three years ago. VandaTrack data showed that GameStop had a net inflow of $15.8 million on Monday and AMC attracted $37.5 million, while the peak single-day inflows in January 2021 were $87.5 million and $170 million, respectively.
Analysts pointed out that the current market environment is different from 2021, when there was a large amount of stimulus funds. Josh Gilbert, an analyst at eToro, said that short positions on GameStop are much smaller than in 2021, which may curb the scale of the rise.
Inflation remains the main factor hindering the rise of risky assets. The latest US producer price index (PPI) showed that wholesale prices rose 0.5% month-on-month in April, higher than expected. Secure Digital Markets said that if the Fed does not cut interest rates in advance, investors may need to experience a period of relative calm.
Michaël van de Poppe, founder of MN Trading, believes that if Bitcoin bulls hold $60,500, the next resistance level is $63,000, but if it falls below this support level, BTC may fall to between $52,000 and $55,000.
