Basic Attention Token Bucks the Downtrending Market, Will It Last? - Price Analysis

  • Short term: local uptrend looking tired here
  • Long term: a strong uptrend that may continue, but needs to be retested

One of the most popular mid-cap altcoins, Basic Attention Token (BAT) has been on a tear for over a month, after finding its regional bottom in early September. Now, after several large pushes to the upside, BAT is hitting resistance at another market inflection zone. We consider the altcoin’s options from here.

Starting on a daily BAT/BTC chart, we see that a clear uptrend obtains, with EMAs expanded in a bullish configuration (smallest on top). We see volume generally rising with each big push, although on the last push it dropped off somewhat.

A solid run hitting resistanceBAT chart by TradingView

After such a strong push, a bit of caution should definitely be used as BAT could likely see a pullback here, even if the larger uptrend continues in the long term. Many stop losses are no doubt being tightened up as price engages the inflection zone (grey) that will serve as resistance.

Moving to the 4-hour, we see signs that price may be losing its uptrend steam. The RSI has shown a series of bearish divergences from price, as has the histogram. Buy volume has been falling on the latest push up, and we see a rising wedge consolidation forming at the end of a solid and lengthy push up.

signs of fatigueBAT chart by TradingView

These are classic signs of exhaustion, and we may soon see BAT break down from this rising wedge. The histogram has contracted into a very tight pattern, also suggesting a coming move. A correction here would be completely reasonable, and not necessarily signal an end to the larger uptrend, just a pause.

It is not impossible that BAT breaks clean through the resistance onto higher levels, but it is more likely here that a pullback is coming. As stated above, this doesn’t necessarily mean the end of BAT’s larger uptrend -- in fact it would be healthy for preserving it, with some retests of previously taken levels.

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