Analysis
Basic Attention Token: Pay attention to these demand zones for bullish prospects
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
Bitcoin Dominance has been falling slightly in the past three days, from 44.04% to 43.05%. This meant that altcoins have gained some market share compared to Bitcoin. At the same time, Bitcoin saw a short-term surge past $40k, which aided in the bullishness of the recent days for many altcoins. Basic Attention Token was one of them. The Fibonacci extension levels showed that further upside can be right around the corner.
BAT- 2H
Source: BAT/USDT on TradingView
On the charts, two areas of interest in the short term are marked in cyan. The first is in the $0.85 region, which has seen a bearish order block form in mid-February. In the past couple of days, the price has closed a session above this area, breaking it.
However, the 61.8% extension level at $0.89 has not been broken. Instead, it temporarily halted the bullish advance of BAT. The Fibonacci levels were plotted based on BAT’s move from $0.56 to $0.766.
Generally, these moves extend to the 100% extension level, which in this instance lies at the $0.966 mark. Beneath that, $0.949 also presented a horizontal level of resistance.
The other area of short-term interest is the $0.82 demand area, which has acted as support recently and could be tested once more.
Rationale
On the RSI, a bearish divergence was seen a couple of days ago (dashed white) between the momentum and the price. However, the RSI continued to remain above neutral 50 to denote the presence of a bullish trend.
Alongside, the OBV has also been trending upward in the past two weeks to show steady buying volume. CVD has also shown high buying pressure in the past few days.
Conclusion
Overall, the indicators showed strong bullish momentum and buying volume present behind the rally of Basic Attention Token. The presence of a bearish divergence saw a pullback, but at the time of writing the price looked to be headed upward once again. The 100% extension level at $0.966 presented a possible take-profit target for long positions. At the same time, some caution could be advisable as Bitcoin approached local resistance at $42k and could see a rejection over the weekend.
