GME and KITTY tokens form God candles but gains could be brief

The GME crypto token formed a God candle on Sep. 6 after Roaring Kitty made a surprise return to X ahead of GameStop’s earnings.

GME (GME) surged to a high of $0.0052, its highest swing since June 24, and 93% above its intraday low. It has risen by 168% from its lowest level in August, making it one of the best-performing cryptocurrencies in the market. Its market cap jumped to over $32 million.

GameStop’s stock also rose by over 3.7%, even as a sea of red spread in the market, with the Dow Jones and Nasdaq 100 indices falling by 0.90% and 2.43%, respectively. Bitcoin (BTC) dropped to $53,000 while the market cap of all coins fell below $2 trillion.

This performance happened after Keith Gill, popularly known as Roaring Kitty, returning to X, sending the post below. The thinly traded Roaring Kitty (KITTY) token also formed a God candle, rising by over 65%. A God candle is a sudden bullish candlestick that catches traders off guard.

Gill is one of the more popularized traders due to his role in the meme stock frenzy in 2021. Most recently, in May, he returned to the market, pushing meme companies like GameStop, AMC, and Faraday Future sharply higher.

Gill’s return is notable because it happened as GameStop prepares to publish its financial results on Sept. 10. Analysts have low expectations for the company as its business continues slowing down. The average estimate among analysts is that its revenue dropped from over $1.1 billion in Q2’23 to $895 million this year.

The company is facing major headwinds as more gamers opt to buy games and consoles online and as operations costs rise. 

It remains unclear whether the GME and KITTY tokens will sustain the ongoing rally. Historically, such gains have been short-lived. In May, the GME token rose from $0.0035 to $0.029 after Roaring Kitty’s return, only to erase all those gains within a few days. It dropped to a record low of $0.0017 in August.

Similarly, KITTY surged to $0.093 amid the hype and then fell by almost 100% to a low of $0.0013 in August.