Basic Attention Token Technical Analysis: BAT whales on a buying spree despite bearish signs


  • BAT non-exchange wallet holders increase their accumulation following the dip earlier this month.
  • On-chain metrics suggest that the path of least resistance is downwards until formidable support is found.

Basic Attention Token, like many other cryptocurrencies in the market, is in the middle of a retreat following the losses posted in the first week of September. Although support at $0.22 came in handy, recovery has not been rapid as investors expected. Resistance at $0.28 has continued to give the bulls are a hard time, hence delaying recovery.

Why are BAT large volume holders stocking up?

Santiment, a leading provider of on-chain data in the industry, says Basic Attention Token whales “appear to be back to accumulating.” The large non-exchange wallets are perhaps buying the dip in anticipation that BAT will reverse the trend and embark on a massive rally to $3.5.

Top non-exchange holders of BAT

BAT holder distribution

According to the data, the amount held by top non-exchange addresses has increased significantly from 359.51 million BAT on September 8 to 376.33 million BAT on September 15. There was a spike to 392.86 million on September 14, but some wallets offloaded some coins. Generally, whales are accumulating, and in due course, this could lead to a reversal in the price.

Basic Attention Token technical analysis

The stubborn resistance at $0.28 led to an ascending triangle, as seen in the chart below. Ascending triangles are common patterns in technical analysis. A horizontal line is drawn alongside the highs made by the asset, while an ascending trendline is drawn to mark the lows. Breakout from these patterns can be either up or down. However, ascending triangles tend to signal the continuation of the trend before.

For instance, the BAT/USD 4-hour chart's ascending triangle seems to be continuing the downtrend before the pattern. The declines are currently supported by the Relative Strength Index (RSI) as it dives towards the oversold (30 and below). If support at $0.24 caves in, we can expect BAT to extend the lower leg back to September’s support at $0.22.

BAT/USD 4-hour chart

BAT/USD price chart

Basic Attention Token on-chain analysis

The IOMAP metric by IntoTheBlock highlights the struggle BAT is bound to face in its recovery. The initial resistance at 0.24 - $0.25 seems relatively easy to bring down considering the 12,050 addresses that previously bought 24.82 million BAT in the range. Unfortunately, the price action above this zone will run into extreme selling pressure between $0.25 and $0.26. Only when this zone is flipped into support is that the price can rally to $0.35.

IntoTheBlock IOMAP

BAT IOMAP by IntoTheBlock

On the flip side, initial support between $0.23 and $0.24 does not seem strong enough to hold BAT, at least not for long. Note that 12,630 addresses had previously purchased 40.62 million BAT in this zone. A retreat below this first support area could see BAT spiral to the major support at $0.2130 - $0.22, where 9,020 addresses bought a 142.82 million BAT.

The decrease in the number of new addresses also validates the bearish notion. IntoTheBlock shows that the new addresses created on the network dropped from 1,170 on September 13 to 966 on September 15. The downward trend signals a higher probability of continuing bearish price action.

BAT new addresses

BAT new addresses by Santiment

Looking at the other side of the fence

Although most of the indicators are bearish for BAT, there is a likelihood of the whales currently accumulating becoming the ultimate winners, especially if the double-bottom pattern in the hourly range comes into play as expected. Support at $0.24 will have to hold water while bulls shift their focus to the critical resistance between $0.25 and $0.27. The short term recovery is also highlighted by the Relative Strength Index (RSI) as it moves closer to the midline.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Bitcoin difficulty ribbon flashes buy signal

BTC is trading around $10,715 and sitting on top of the $10,700 support level. The buyers need to do everything that they possibly can to defend this level. If the sellers break below this level, the price can plummet to $9,700 before it meets another healthy support.

More Bitcoin News

Ethereum Market Update: ETH continues to consolidate position below $360

The ongoing boom in decentralized finance (DeFi) space has been very beneficial for Ethereum. The demand for ETH has continuously surged in recent times. However, it is DeFi that’s dominating the headlines in ...

More Ethereum News

Chainlink Price Analysis: LINK goes through consolidation, preps for a breakout

LINK broke above the downward trending line this Thursday and is currently trending horizontally between the $10 support line and the SMA 20 curve. This indicates that LINK is presently in a ...

More ChainLink news

Theta Price Prediction: THETA poised for a healthy pullback before resuming uptrend

THETA has been trading inside a robust uptrend for the past four months and hit a new all-time high at $0.76 on September 28. Its market capitalization has grown from $46 million on March 16, to a current high of $640 million.

More Bitcoin News

BEST CRYPTO BROKERS/EXCHANGES

Bitcoin Weekly Forecast: Keep calm and HODL on until the USA elects the president

Bitcoin (BTC) partially regained the losses incurred at the beginning of the week; however, the upside momentum is still too weak to take the price out of the bearish territory and ensure a sustainable recovery. 

Read the weekly forecast

BTC

ETH

XRP