Bitcoin has remained relatively calm in recent days, hovering around the $60k mark. After setting new highs last Wednesday, the price of the world's largest asset plummeted in the early hours of the 27th. In fact, it was trading at $58.8k at the time of publication. This accounted for drops of 6% and 8% on daily and weekly timeframes, respectively.
Along with Bitcoin, the majority of the market's other tokens fell off the charts. However, gaming tokens have been able to maintain their near-high levels to some extent. At the time of writing, the top ten tokens in this range had positive weekly returns and had increased by 2 percent -101 percent over the course of the window.
The precipitating factors
Until recently, the majority of the aforementioned coins strictly followed the broader market trend. However, a couple of other factors are now to blame for their dramatic increase.
Initially, credit should be given to the tokens' improving metrics. Let's look at the state of four popular game tokens – AXIE, SAND, VRA, and ENJ – to get a sense of the overall sentiment.
Deposit transactions for the first three coins, for example, have recently been more inclined toward their respective low sides. This metric displays the total amount of incoming and outgoing transactions involving token deposit addresses on a daily basis. Spikes typically signal an increase in short-term sell pressure and vice versa.
With this current plateaued state in mind, it can be asserted that HOLDERS would not sell at this point.
Enjin Coin's indicators have also begun to show bullish signs. Consider the price DAA divergence as an example. As can be seen in Santiment's chart below, this metric has begun to project a bullish signal since October 25.
The Price-Data model monitors the relationship between the coin's price and the number of daily active addresses that interact with the coin. When the DAA Divergence increases in tandem with the price, a buy signal is displayed. When the number of active addresses falls during a price increase phase, selling pressure is induced.
ENJ beginning its bullish streak on the chart indicates that the active addresses are in good health. In effect, the environment has been relatively favorable for ENJ's rally to continue.
Since the beginning of October, the MVRV ratio for all four tokens has also been increasing. This means that at this point in the market, investors are earning more than usual.
It's strange to see all of the gaming tokens rallying at the same time that BTC and the broader market are trading in the red, isn't it? At this point, it's worth noting that Steam, a popular digital gaming platform, has recently banned all games that include crypto/NFT exchanges. People in the game-fi industry obviously did not take the news well.
To a large extent, the price movements of these tokens appear to be a reaction to Steam's ban on blockchain-based games. Nothing can be said with certainty, but the Steam factor cannot be ruled out.
Despite the fact that these tokens are rallying at the moment, they could succumb to the broader market trend at any time. Nonetheless, given the healthy state of the metrics, these coins should be able to recover faster than the others.