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This article breaks down the recent GALA price action and discusses the technical outlook for the token into year-end.
Gala (GALA) is unchanged at $0.437 (+0.05%) in early trading Thursday, down 14% in the last 7-days and -30% in December. Due to the poor performance this week, the gaming and NFT platform’s market cap has fallen to approximately $3 billion ($5.7b last month), ranking its native GALA token the 50th most valuable cryptocurrency behind EOS.
Similar to other gaming-related cryptocurrencies, like The Sandbox (SAND) and Decentraland (MANA), Gala Games has erased a large portion of the gains it made last month. Several factors are responsible for the decline in gaming cryptos over the previous four weeks. Firstly, the massive influx of capital into the sector stretched valuations to unrealistic levels. Secondly, the crypto market as a whole has turned lower in December as fears over central bank policy tightening encourages profit-taking. Subsequently, the Gala price action suggests holders are trying to offload tokens at increasingly lower levels.
The 4-hour chart shows bounces are becoming increasingly shallow, suggesting sellers are lowering their limits. Furthermore, the ‘lower lows’ indicate buyers are losing confidence. As a result, the token is trending towards the November 23rd low of $0.359.
Considering the rapid appreciation in November (+550%), it’s logical to expect holders to deleverage for the foreseeable future. On that basis, the GALA price could easily overshoot on the downside. If the $0.359 support fails, an extension to the November 20th low of $0.230 is likely.
The bearish view remains in place as long as the price is trending lower. Therefore, clearance of the descending trend line at $0.485 invalidates the thesis.
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This post was last modified on %s = human-readable time difference 02:52