On Nov. 26, the Basic Attention Token (BAT) surged to a new high, even as global markets fell in lockstep over fears of a highly mutated form of COVID-19 being discovered in South Africa.
BAT’s stock price jumped over 30% to $1.88 for the first time, bringing its market capitalization to $2.74 billion. Its rise contrasted with the bitcoin market’s loss of almost $283 billion over the same time period.
BAT snubs crypto crash
Bitcoin (BTC), the world’s most valuable cryptocurrency by market capitalization, took the brunt of the losses, tumbling as much as 7.5 percent to around $54,000. The second-largest cryptocurrency, Ether (ETH), has plunged nearly 9% to approximately $4,000. The prices of Solana’s SOL, Cardano’s ADA, XRP, Binance Coin (BNB), and other tokens all dropped at the same time.
Crypto traders rushed to BAT, owing to its weaker positive correlation with the most popular digital assets. The 30-day correlation coefficient between Basic Attention Token and Bitcoin was 0.24, and the same for Ether was 0.27, according to data tracker Cryptowatch.
That helps to explain why BAT was able to disregard the market’s overall downturn on November 26.
Bullish indicators in play
Traders rushed to lock in their intermediate profits when BAT’s price surged to a new high. As a result, after achieving $1.88, the token corrected by more than 20%, reverting below its strong resistance level around $1.50.
Since April, the $1.50 level has been as resistance to two technical setups forming on BAT charts. First, the level formed a bullish cup-and-handle pattern, which is now forming. Second, as indicated in the chart below, it aided in forming a broad ascending channel configuration.
BAT was working on the first part of the cup-and-handle pattern at publishing, a rounded bowl bottom known as the cup. The second phase, if it appears, will be a price adjustment within the handle of a descending channel range.
Traders may be looking for a run-up higher to a level equal to the maximum cup-and-handle pattern’s height if the handle breaks out of its trading range and $1.50 resistance. BAT’s price is expected to rise to $2.75 in the following sessions due to this.
Meanwhile, after calculating the structure’s maximum height from its possible breakout point near $1.50, the profit goal for BAT’s ascending triangle pattern — verified by more than two higher lows and a flat upper trendline — comes to almost $2.90.
A break below the triangle’s lower trendline, on the other hand, would render the bullish setup; including the cup and handle, useless. If that happens, the next resistance level for a complete bearish confirmation appears to be near $0.56.
Source: Cointelegraph
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