Is GameStop (GME) stock a buy after the NFT wallet launch?

The GameStop (NYSE: GME) stock price moved sideways on Monday even after the company launched its new digital wallet for NFT shopping. The stock is trading at $95.40, which is about 20% above the lowest level this month. The firm’s market cap has moved to about $7.22 billion.

GameStop moves more into crypto

GameStop is a leading American retailer that is widely known for selling video games and consoles in its stores and e-commerce platform.

Are you looking for fast-news, hot-tips and market analysis?

Sign-up for the Invezz newsletter, today.

The company became the original meme stock when its stock rallied from less than $3 in April 2020 to almost $500. With the meme stock mania gone, the company’s stock has crashed by more than 80% from its 2021 high. 

With its business slowing, GameStop is now trying to achieve growth in other areas. One of these areas is in the blockchain industry. A few months ago, the company announced a new partnership with Loopring, the layer2 zkRollup solution. 

As part of this partnership, GameStop will use Loopring’s technology to develop its non-fungible token (NFT) marketplace. The new platform will ensure users receive their digital property rights that are secure and decentralized. 

In a statement on Monday, GameStop announced that it launched its digital asset wallet that will allow gamers and others to send, store, and use cryptocurrencies without leaving their web browsers. 

Still, the GameStop stock price will likely maintain their bearish trend in the coming months. For one, income from this new digital industry is expected to be significantly small. Recently, well-known companies in the sector like Robinhood and Coinbase have published weak results. 

Further, GameStop’s core business is still struggling as people embrace digital game solutions such as game streaming. In the past three years alone, the company has lost more than $1.5 billion and these losses are expected to keep rising.

GameStop stock price forecast

Turning to the daily chart, we see that the GME stock price has been in a downward trend for a while. The stock has formed a descending channel shown in green. It has also managed to move below the 25-day moving average while the Stochastic Oscillator has moved above the oversold level, Notably, its volume has also been falling.

Therefore, there is a likelihood that the GME stock price will resume the bearish trend and retest the lower side of the channel. If this happens, the next key support to watch will be at about $60.