2019-9-25 16:32 |
Basic Attention Token is back under pressure after surging higher over the weekend The BAT / USD pair found strong medium-term resistance from a falling wedge pattern Substantial bearish MACD price divergence is still present on the daily time frame
Basic Attention Token is back under downside pressure as the broader cryptocurrency market slides lower, leaving the BAT / USD pair in a vulnerable technical position. The cryptocurrency staged a powerful upside rally over the weekend, gaining around thirty percent in value from its September trading low.
The latest sell-off in the cryptocurrency market has notably affected the BAT / USD pair, helping to erode around eighteen percent of its value from its monthly price peak and placing it in a undesirable technical position.
Going forward, medium-term technicals for the cryptocurrency certainly suggest that the BAT / USD pair could still encounter another round of heavy selling unless a sustained rally is enabled above its current monthly price high.
The daily time frame shows that the current monthly high is important as it the upper end of a large falling wedge pattern. The falling wedge pattern is characterized as a bullish reversal pattern with triple-digit upside potential, if a substantial upside breakout were to occur.
At present, no meaningful technical breakout has been sustained on the lower timeframes to suggests that the BAT / USD pair could stage such a breakout. In fact, price still trades below important moving averages on the four-hour time frame.
Worryingly for BAT / USD bulls is the negative MACD price divergence, which has been in place since February this year. The bearish MACD divergence is still very much in play and could see the cryptocurrency suffer losses of around thirty percent from current trading levels if it is unwound.
From a technical perspective a break below the current monthly trading low should encourage a sell-off towards the February trading low. Interestingly, the bottom-end of the falling wedge pattern is also located extremely close to the end of the bearish MACD price divergence, leaving sellers with a distinct downside target.
According to the latest sentiment data from TheTIE.io, the short-term sentiment towards Basic Attention Token is bullish, at 60.00 %, while the overall long-term sentiment towards the cryptocurrency is neutral, at 55.00%.
BAT / USD H4 Chart by TradingView Upside Potential
The four-hour time frame highlights yesterday’s swing -high as the most important technical resistance area, prior to the BAT / USD pair’s current monthly trading high. A potential inverted head and shoulders pattern could form if a rally ensues above the current monthly trading high.
The daily time frame highlights the 50-day as a key technical area where bulls need to gain strength to encourage additional buying interest. At present, a breakout above the falling wedge pattern on the daily time frame is likely to prompt a major test of the cryptocurrencies 200-day moving average.
BAT / USD Daily Chart by TradingView Downside Potential
The four-hour time frame is showing that the BAT / USD pair is testing towards its 200-period moving averages, leaving the September 18th swing-low as the strongest form of near-term support below.
The daily time frame is showing the current monthly trading low as the major technical support region. Below this area, the bottom of the falling wedge pattern offers the strong form of technical support.
SummaryBasic Attention Token has shed over half of its recent trading gains, placing it in a vulnerable technical position going forward.
If bulls fail to move the cryptocurrency back above the current monthly trading high, sellers could force the cryptocurrency back towards levels not seen since February this year.
Head over to our coin guide for BAT and the Brave Browser for an intro to the project.
Also, an in-depth dive into BAT is available in our DARE.
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