GAS Surges Over 400% in 2 Weeks: Unpacking the Volatility

Explore the reasons behind GAS cryptocurrency's 400% surge and understand the market dynamics of altcoin volatility. Stay ahead in crypto trading.

In the often unpredictable world of cryptocurrencies, every so often a lesser-known altcoin makes headlines with a jaw-dropping rally.

Chart by TradingView

GAS, an altcoin with a modest market capitalization compared to the industry's giants, has done just that. On Friday, October 20th, GAS embarked on a meteoric rise, notching an over 400% increase in value within a mere 18 days.

The Unconventional Dynamics of GAS

The typical trading wisdom of support and resistance levels, often reliable for well-established cryptocurrencies, tends to be less applicable to GAS.

As a less capitalized altcoin, GAS doesn't play by the same rules as its bigger counterparts. The usual technical analysis tools like the Relative Strength Index (RSI) and Williams %R oscillators often fall short in predicting its movements.

GAS is prone to dramatic price swings commonly referred to as ' pumps and dumps', a situation where the price is driven up or down sharply by retail traders rather than fundamental changes in the cryptocurrency market.

This heightened volatility stems partly from the absence of large-scale algorithmic trading that is typical in the more capitalized coins.

Without the influence of trading algorithms, which tend to inject a degree of predictability and stability into the markets, GAS's price trajectory is more erratic.

The Silver Lining: Trend-Following Indicators

While traditional metrics may falter, trend-following indicators like the 200 Simple Moving Average (SMA) have proven more effective with GAS.

The reason? Retail traders tend to rely heavily on trend-following indicators to gauge the end of market trends. When a significant number of traders pivot on the same technical indicator, it becomes a self-fulfilling prophecy.

The 200 SMA thus transforms into a dynamic support or resistance level: a break above signals a potential bullish phase, while a drop below could spell a bearish turn.

Looking Ahead: The case of GAS is a reminder that the cryptocurrency market is a diverse ecosystem where different rules can apply to different cryptocurrencies. Currently, GAS is in a strong uptrend; for GAS to continue its current uptrend it needs to stay above the 200 SMA.