Gaming crypto GALA rallies nearly 350% in November — Correction ahead?

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Gala Video games’ in-house foreign money GALA rallied by almost 350% in November, ignoring corrections throughout the highest cryptocurrencies, together with Bitcoin (BTC). Notably, GALA worth surged from $0.088 to $0.42 between Nov. 1 and Nov. 22.

GALA/USD four-hour worth chart. Supply: TradingView

GALA’s positive factors got here primarily within the wake of a worth rally throughout a majority of gaming and metaverse crypto belongings. As an illustration, MANA, the native token of Decentraland — a blockchain-based digital world that permits customers to create, expertise and monetize content material and functions, climbed by greater than 30% month-to-date.

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Equally, SAND, the native asset of decentralized metaverse mission the Sandbox greater than doubled in worth in November. Gaming initiatives, together with Dvision Community (DVI) and Extremely (UOS), have additionally witnessed greater than 100% progress in worth.

Rally or correction forward?

The upside strikes throughout metaverse and gaming tokens picked up momentum after Facebook decided to rebrand its parent company to Meta, with CEO Mark Zuckerberg admitting that they might be “metaverse” —not social media — first.

GALA, whose issuance firm Gala Video games builds blockchain-based video games, soared to its document excessive at $0.489 on Nov. 22 amid the metaverse craze. Nonetheless, the cryptocurrency additionally confirmed weaknesses in its ongoing bullish momentum because it painted a dreaded head and shoulders (H&S) construction.

One of the vital broadly identified and trusted technical patterns, H&S, seems when the value varieties three peaks in a row, with the center one, referred to as the pinnacle, larger than the opposite two, referred to as the shoulders. In the meantime, the three peaks have the identical help degree, referred to as the “neckline.”

On its shorter-timeframe chart, GALA’s p fmed the left shoulder close to $0.39, corrected decrease in the direction of its rising neckline help, rebounded in the direction of $0.48 to type the pinnacle, bought pulled again once more in the direction of the identical neckline, and has now been recovering to type its proper shoulder prime, doubtlessly close to $0.43.

GALA/USD four-hour worth chart that includes H&S setup. Supply: TradingView

A breakout affirmation will seem as GALA closes below the neckline with convincing volumes. Ought to that occur, the Gala Video games crypto would shift its draw back goal at a size equal to the utmost distance between the highest of the pinnacle and the neckline.

Associated: Metaverse gaming tokens Ethverse and Axie Infinity avoid crypto downtrend

That will find yourself placing GALA en path to $0.24, or about 34% beneath the potential level of breakout.

Bearish divergence/Bull Flag

Along with H&S, GALA confirmed a transparent divergence between its rising costs and falling momentum.

Notably, the cryptocurrency’s worth shaped a string of upper highs. In distinction, its relative energy index (RSI), which measures the magnitude of worth adjustments to judge an instrument’s overbought or oversold circumstances, shaped decrease highs, as proven within the chart beneath.

GALA/USD four-hour worth chart that includes bearish divergence. Supply: TradingView

The GALA bull run additionally coincided with a lower in buying and selling volumes, signifying that its worth uptrend didn’t have sturdy underlying momentum.

Because of this, GALA confirmed bearish divergences between its rising worth and falling buying and selling quantity, doubling down the H&S setup as mentioned above. However, the complete bearish outlook risked invalidation ought to the value verify a possible bull pennant setup as an alternative, as proven within the chart beneath.

GALA/USD four-hour worth chart that includes bull pennant setup. Supply: TradingView

The revenue goal for the bull pennant sits close to $0.69, given GALA breaks out of its triangle vary to the upside with an increase in buying and selling quantity.

The views and opinions expressed listed below are solely these of the creator and don’t essentially mirror the views of Cointelegraph.com. Each funding and buying and selling transfer includes threat, it’s best to conduct your personal analysis when making a choice.