BAT price hits new high after 30% daily rally as Basic Attention Token bucks crypto downtrend
However, BAT saw profit-taking sentiment at its new price top, suggesting more downside is possible.
Basic Attention Token (BAT) rallied to a new record high on Nov. 26, even as global markets plunged in tandem on fears of a highly mutated variant of COVID-19 detected in South Africa.
BATs price surged over 30% to reach $1.88 for the first time, with its market capitalization rising to $2.74 billion. Its climb appeared in contrast to the cryptocurrency market, which lost nearly $283 billion in the same period.
BAT snubs crypto crash
Bitcoin (BTC), the world‘s largest cryptocurrency by market cap, led the losses, falling by as much as 7.5% to under $54,000. Ether (ETH), the second-largest, dropped over 9% to almost $4,000. Solana’s SOL, Cardanos ADA, XRP, Binance Coin (BNB) and other tokens plunged in sync.
Crypto traders flocked to BAT, possibly because of its comparatively lower positive correlation with the top digital assets. According to data tracker Cryptowatch, the 30-day correlation coefficient between Basic Attention Token and Bitcoin was 0.24, and the same versus Ether was 0.27.
That somewhat explains why BAT was able to ignore the marketwide downtrend on Nov. 26.
Bullish indicators in play
BATs price rally to its record high prompted traders to secure their interim profits immediately. As a result, the token corrected by more than 20% after hitting $1.88, thus returning below its strong resistance area around $1.50.
In detail, the $1.50 level has served as resistance to two technical setups developing on BAT charts since April. First, the level constituted what now appears to be a bullish cup-and-handle pattern. And second, it assisted in forming a broad ascending channel setup, as shown in the chart below.
At the time of publication, BAT was in the first part of the cup-and-handle pattern, making a rounding bowl bottom called the cup. The second part, should it appear, will be a price correction inside a descending channel range, called the handle.
A decisive breakout from the handle‘s trading range and $1.50-resistance may have traders eye a run-up higher to a level at a length equal to the maximum cup-and-handle pattern’s height. That roughly puts BATs price en route to $2.75 in the coming sessions.
Meanwhile, the profit target for BAT‘s ascending triangle pattern — confirmed by more than two higher lows and a flat upper trendline — comes to over $2.90 after measuring the structure’s maximum height from its potential breakout point near $1.50.
Conversely, a break below the triangles lower trendline would risk invalidating the bullish setup, including the cup and handle. Should it happen, the next resistance level appears near $0.56 for a final bearish confirmation.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, and you should conduct your own research when making a decision.
