Key Points
- Bitcoin’s price trends may correlate with GameStop’s rally and its social volume.
- Recent observations suggest a surge in GME social activity might strengthen a prevailing bullish trend in the crypto-market.
Bitcoin [BTC] surpassed its short-term local resistance at $64.5k on 15 May, just two days following GameStop [GME] recording a 284% rally from the previous Friday. A recent post on X (formerly Twitter) by Santiment suggested that the GME craze might have spilled over to crypto.
This overlap seems plausible considering the speculative nature of the crypto-market, particularly within the memecoin sector. To determine if crowd sentiment can signify cycle tops and bottoms, further parallels were sought.
GME/AMC Social Mentions and Bitcoin’s Price Trends
In the short term, GME/AMC social mentions marked Bitcoin’s peak and trough over the last three days. However, it’s more likely that these social trends coincided with them rather than predicted a shift in trend.
On 13 May, Roaring Kitty ended a 3-year hibernation with a meme on X (formerly Twitter). Two days later, the Consumer Price Index and inflation data were released, showing lower than expected results. This led to an increase in risk-taking tendencies among participants.
GameStop’s social volume was exceptionally high in January and November of 2021. In January 2021, Bitcoin prices had just rebounded from a significant retracement to $31k, before resuming its blistering rally.
Correlation Between GME Social Volume and Bitcoin’s Price
Conversely, the surge in social volume in November 2021 marked the peak for the crypto, and BTC prices soon began to decline. Therefore, despite the recent correlation having an explanation, there might be some validity to Santiment’s latest observations.
Traders and investors might want to monitor these metrics in the future.
The January and November 2021 GME social volume spikes coincided not just with Bitcoin’s rally and tops, but also with the altcoin market’s capitalization. However, the May 2024 one did not. In fact, altcoins’ market cap has been growing since October 2023.
The relationship appears to be that of a surge in GME social activity strengthening a prevailing bullish trend in the crypto-market. However, it will not necessarily create one.
