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STEPN to new highs? GMT price draws the first “bull flag” towards the $5 target

STEPN (GMT) has rallied strongly against the US Dollar this week as it is likely to form a classic bullish technical pattern called the “Bull Flag”.

GMT looks more up

GMT price is up 30% for weeks including a strong rally to hit an all-time high near $3.85 followed by a relatively modest correction close to $3. Notably, the corrective phase took place inside a descending parallel channel, raising the possibility that the price would eventually break out to the upside.

This is precisely because traditional analysts see sharp rises followed by price corrections in the range as bullish continuation setups. And the only GMT that GMT has painted – a bull flag as mentioned above – could lead to an upward boom in the coming weeks as illustrated in the chart below.

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GMT/USD 4 hour price chart with Bull Flag setup. Source: TradingView

Typically, traders identify a bull flag target by measuring the height of the previous uptrend and projecting it from the breakout point. Applying the classic setup to the GMT chart shows that it is now expecting a surge above $5, some 65% above today’s price.

The success rate of bull flags in hitting their upside targets is nearly 64%, according to Thomas Bulkowski, a veteran investor and analyst.

But the risk of a drop towards $2 will become high if GMT price breaks below the bull flag lower trendline, the last support line associated with the 50-4 hourly exponential moving average (50-4 hourly EMA; the red wave) coincides at $2.91.

STEPN’s 38,000% profits are “an absolute joke”?

GMT is up nearly 38,000% in less than two months amid hype surrounding STEPN’s “move-to-earn” economic model, which rewards users of its app with a native currency called the Green Satoshi Token (GST) for just spending move.

STEPN generates revenue ($26.81 million in Q1 2022) through the sale of its so-called “NFT sneaker” — a unique digital image owned by which enables players to earn GST in the first place. The game uses the proceeds to first buy and then burn GMT, putting upward pressure on its prices as demand for the token increases.

Independent market analyst Wangarian believes the hype surrounding STEPN is similar to what Axie Infinity (AXS), a play-to-earn gaming metaverse, experienced in May 2021. AXS/USD rallied from around $2.50 to around $178 between May and November of last year.

However, independent market analyst Michaël van de Poppe said: fears that GMT’s market cap, which sits at around $1.9 billion — at a fully diluted valuation of around $18 billion — is an “absolute joke.”

But GMT “reviews can still get ridiculous,” he adds, due to STEPN’s marketing tactics.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.