GameStop shares rose in pre-market trading on Friday after it was announced that Keith Gill, also known as “Roaring Kitty,” would be returning to YouTube after a three-year hiatus. However, the latest GameStop earnings news and the growing bearish sentiment in the meme coin market could lead to a Solana meme coin GameStop collapse.
A massive GameStop stock sell-off could weaken the value of the Meme coin
GameStop reported lower quarterly sales and unexpectedly said it would sell up to 75 million shares on Friday, ahead of a long-awaited livestream by stock meme influencer Keith Gill.
Shares of the struggling video game retailer, which reported results four days ago, fell nearly 22% to $36 and then paused due to volatility. Gill, known to traders as “Roaring Kitty” and famous for sparking a huge rally in GameStop shares in 2021, announced a live broadcast scheduled for 12 noon ET on YouTube.
Read also: GameStop Frenzy 2.0: Meme Coins Explode as Roaring Kitty Returns!
This is not the first time GME has benefited from Gill’s short squeeze tactics. Last month, GME sold 45 million shares, dampening the initial rally generated by Jill’s simple meme posting.
Gill still holds 5 million shares of GME stock and 120,000 call options that are set to expire on June 21, with a strike price of $20, according to his screenshots.
According to our analysis, we may soon witness a massive collapse in GME price as it faces a sharp decline in the last few hours. GME meme investors should be wary of the “news selling” effect after Jill ends his YouTube live stream.
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The “news selling” effect occurs when prices rise before a major event and then fall sharply afterward. This happens because investors buy before expected good news and sell their shares quickly after the event to lock in profits, resulting in a sudden drop in price.
A clear example of this is Dogecoin (DOGE) falling 25% just minutes after Elon Musk, a major backer, spoke about it on “Saturday Night Live” in May 2021.
What’s next for GME price?
GME price made a strong comeback as it rose from a low of $0.01 to a new ATH of $0.032. However, over the past few hours, GME price fell below the direct Fibonacci channels, reinforcing bearish dominance. As of writing, GME price is trading at $0.021, up more than 67% in the past 24 hours.
The 20-day Exponential Moving Average (EMA) at $0.022 is on a slight downward path, and the Relative Strength Index (RSI) is falling below its mid-line, indicating that sellers have the upper hand. The GME/USDT trading pair may fall to the breakout point of $0.013 to test the patience of buyers.
However, this bearish outlook could be invalidated if the price rebounds and rises above the EMA20 trend line. Under these conditions, the pair may reach the $0.032 level and target a new ATH.