GameCredits Price Analysis — A whole new ball game

June 20, 2018

Global gaming is a large industry estimated to be worth around $100 billion annually. Within this sector GameCredits has been at the forefront of driving blockchain solutions specific to the needs of the industry.

GAME tokens are the universal in-game tokens of the network which are developed and secured using distributed ledgers. The core GameCredits product is developer platforms to create in-game monetization systems. With it, developers can create payment infrastructure for their games including; wallets, payment trackers, APIs and game hubs.

Trading pairs and exchanges

 

The most popular pair for trading GAME tokens is GAME/BTC which dominates more than 85% of the trading volume. The most popular fiat pair is the GAME/Polish Zloty which makes up close to 15% of the transaction volume.

 

There are currently eight exchanges trading the GAME/BTC pair, with American exchanges Bittrex and Poloniex being the most popular. 

A focus on gaming growth sectors

An interesting feature of the GameCredits product suite is its identification and focus on specific growth sectors within gaming — for example Fantasy Sports betting, Mobile gaming and E-sports monetization systems. These are all expansions to the previous focus of gaming ecosystems on single player, local multiplayer and online multiplayer products. This forward-looking approach should serve GameCredits well in its future, as game developers shift towards new ventures.

GameCredits has signed a deal with major game engine provider, Unity, which is known for supporting popular mobile games Temple Run and Heartstone. Unity developers will be able to build payment infrastructure for their games using the GameCredits platform.

GameCredits also recently announced a deal with major fantasy sports platform, FanDuel, that will let users earn GAME tokens (which are cross platform between supported games), as they participate in a Football World Cup game on the FanDuel service. For GAME it will mean extensive promotion and exposure to FanDuel’s six million members. 

The deal is seen as an endorsement of GAME as a utility token as FanDuel could have picked any cryptocurrency as the reward for its World Cup game but the industry-specific focus of GameCredits appears to have been key to its selection.

Added security: Komodo integration

One of the larger issues plaguing smaller proof-of-work networks, is double-spend attacks and specifically, 51% attacks. GAME has announced an integration with the Komodo blockchain, where Komodo miners will ‘notarize’ blocks created on the GameCredits network, creating a delayed proof-of-work style system.

51% attacks such as those on Verge(XVG) and Bitcoin Gold(BTG), occur when a network user makes a transaction, then using accumulated hash power (made up of 51% of a network’s mining power), reverses this transaction by mining blocks but not advertising them, and then broadcasting these blocks once they (the attacker) has been credited for the original transaction. The same set of tokens is used for two transactions and the attackers receive free coins.

The notarization will work by Komodo notaries running GameCredits clients and monitoring blocks being created on the network. At intervals, Komodo miners receive a hash from the GameCredits chain and write it onto the Komodo chain, noting down which Komodo block has the notarization.

Then, if there was an attempted double spend and an attacker tried to fork GameCredits, since blocks are continuously being notarized, the new blocks created as a result of the double-spend would be rejected. Thus, the Komodo integration lets GameCredits maintain decentralization — while offering higher user security.

Recent price movements

The value of GAME tokens has fallen 36.5% over the last month and it has suffered along with the rest of the market from overall bearish sentiments surrounding crypto. However, there was short spike in the price (June 5th) following the announcement of the Komodo integration and the new delayed proof of work-style protocol.

While the Fanduel/GameCredits partnership has not impacted prices to date, it is reasonable to assume as the World Cup progresses and more tokens are allocated as player rewards, market awareness of GAME will increase.

Technical analysis

In keeping with the overall market GAME has had a rough year to date, but has seen some boost from its Komodo integration announcement.

Exponential Moving Averages (EMA) with Long Term Trends

On the daily chart, the bullish EMA recross, or Golden Cross, using the 50/200 day EMA, has not occurred since the bearish cross back in March (black arrow). GAME’s low liquidity and overall declining crypto market has put a demonstrable drag on GAME, with price falling ~87% from its all-time high of $7.05 back in January 2018.

 

Price volatility for GAME is compressing, visualized by bollinger bands. Volatility compression typically precedes a breakout. The last two times GAME experienced compressed bollinger bands (black rocket ships) were back in Mar/Apr and Nov/Dec 2017, before price went higher (orange arrows). Additionally, the volume flow indicator (VFI) is above 0 and has been forming an uptrend (yellow arrow) since May 23rd. The VFI interpretation is: a value above 0 is bullish and below 0 is bearish, with divergences between price and oscillator being high probability signals. There is currently a divergence between the VFI and price which may be flashing a strong buy signal for GAME.

Ichimoku Clouds with Slow Wave Trend Oscillator (SWTO)

The Ichimoku Cloud uses four metrics to determine if a trend exists; the current price in relation to the Cloud, the color of the Cloud (red for bearish, green for bullish), the Tenkan (T) and Kijun (K) cross, Lagging Span (Chikou), and Senkou Span (A & B).

The status of the current Cloud metrics on the daily time frame with singled settings (10/30/60/30) for quicker signals is bearish; price is beneath the Cloud, Cloud is bearish, the TK cross is bearish, and the Lagging Span is beneath the Cloud and price.

A traditional long entry would occur with a price break above the Cloud, known as a Kumo breakout, with price holding above the Cloud. From there, the trader would use either the Tenkan or Kijun as their trailing stop.

GAME is currently sitting at ~$0.91 which is within its long term support range of $0.80 to $1.00 dating back to April 2017. Previously, price attempted a Kumo breakout, but failed around the psychological and technical resistance level of ~$2.00. Since then, the positive TK cross has reversed, price has fallen back beneath the Cloud and erased all gains. However, the SWTO is near oversold territory (orange arrow), which may help price curb further short term declines. The next Kumo breakout attempt will need to hold above $1.16 and $1.49 to re-ignite a bull trend with potential price targets of $2.00 and $2.50 afterward.

 

The status of the current Cloud metrics on the daily time frame with doubled settings (20/60/120/30) for more accurate signals is bearish; price is beneath the Cloud, Cloud is bearish, TK cross is mixed, and the Lagging Span is below Cloud and price.

Price will need to breakthrough the Cloud resistance level of $1.16 and hold above $1.71 to successfully complete a Kumo breakout, while a failure will result in a likely retest of the lower support levels with $0.80 (black line), which is critical to hold or else the $0.50s (blue line) come into view. However, if price does achieve a Kumo breakout, then $2.00, $2.50, and $2.90 are likely price targets.

 

Conclusion

GAME is an interesting coin that is attacking the specific and large business niche of gaming.

The Ichimoku Cloud technicals for GAME are bearish, but the VFI divergence and bollinger bands might be leading indicators of a price trend reversal in the near future. The prudent short term trader (10/30/60/30 settings) will await a positive TK cross, Kumo breakout, and price hold above $1.16 to $1.49 before entering a long position. The prudent longer term trader (20/60/120/30 settings) will await a positive TK cross, Kumo breakout, and price hold above $1.71 before entering a long position.

More adventurous traders may view the VFI divergence and bollinger bands as a signal to begin scaling into a long position at better prices while the bear trend remains intact. Those traders should use tight stops beneath $0.80, but should expect price targets of $1.50, $1.71, and $2.00 over the coming months, if their gamble proves correct. However, awaiting a successful Kumo breakout will provide a more reliable signal and mitigate the downside risk beneath $0.80.

One of the biggest challenges for any token is establishing itself as a viable investment with a compelling use case. GameCredits clearly has utility, and GAME tokens are already being used for transactions within online games like Fragoria. However, the focus on a niche, specialist product like monetized online games may limit potential  investors and put a ceiling on future growth. There are also concerns with liquidity. There are currently only five trading pair options for GAME, with the most used stablecoin option, Tether (USDT), not being one of them.

Despite these concerns, GameCredit’s security enhancements, and partnerships with major industry clients, continue to make it a compelling investment with solid fundamentals.

Disclaimer: This analysis has been designed for informational and educational purposes only. Readers are advised to conduct their own independent research into individual assets before making a purchase decision.

About the authors

Christopher Brookins
Christopher Brookins is the founder and CEO of Pugilist Ventures, a quantitative investment firm focused on digital assets and blockchain technology. Chris has a deep knowledge and unique perspective on digital assets formed by his polymath experience in equity trading, credit investing, and business development at two West Coast startups (one acquired). He has been involved in the blockchain community since 2014. Follow @chris__brookins

 

Aditya Das
Aditya Das is Brave New Coin’s in-house market analyst. Raised in Dubai, UAE, he holds a post-graduate honors degree in Economics from the University of Auckland and a BA in Economics from the University of Sussex. Prior to joining BNC his most recent roles were as a researcher and Economics tutor at the University of Auckland. Follow @Quartlifecrypto  

 

 

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