Basic Attention Token (BAT) rallied to a new record high on Nov. 26 even as global markets plunged in tandem on fears about a highly mutated variant of Covid19 detected in South Africa.
BAT’s price surged over 30% on Friday to reach $1.88 for the first time in history, with its market capitalization rising to $2.74 billion. Its climb appeared in contrast to the cryptocurrency market that lost up to nearly $283 billion in the same period.
BAT market capitalization. Source: CoinMarketCap
BAT snubs crypto crash
Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, led the losses by falling by as much as 7.5% to under $54,000. Ether (ETH), the second-largest crypto, dropped over 9% to almost $4,000. Solana (SOL), Cardano (ADA), XRP, Binance Coin (BNB), and other tokens plunged in sync.
Crypto traders flocked to BAT — possibly — because of its comparative 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.
BAT’s correlation efficient against top crypto assets. Source: Crypto Watch
That somewhat explains why BAT was able to ignore the market-wide downtrend Friday.
Bullish indicators in play
BAT’s 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 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.
BAT/USD three-day price chart featuring Cup and Handle and Ascending Triangle setups. Source: TradingView
At press time, 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 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 length equal to the maximum Cup and Handle pattern’s height. That roughly puts the BAT price en route to $2.75 in the coming sessions.
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Meanwhile, the profit target for the BAT’s ascending triangle pattern — confirmed by more than two higher lows and a flat upper trendline — comes to be over $2.90 after measuring the structure’s maximum height from its potential breakout point near $1.50.
BAT/USD three-day price chart featuring Ascending Triangle breakout target. Source: TradingView
Conversely, a break below the Triangle’s 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.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
