Basic Attention Token (BAT) Technical Analysis: Brave Ads Rewards Go Live, Can Bulls Break Key Fibonacci Resistance?

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Brave, the company behind Basic Attention Token, has recently announced the release of ‘Brave Ads Rewards’ - a new incentive program which pays out BAT tokens to users who voluntarily view advertisements on the Brave website browser. The new opt-in feature promises to distribute 70% of all ad revenues to participating users, while Brave developers retain the remaining 30%. For now however, all BAT tokens received through the reward program can only be used for tipping content creators, and cannot be traded into fiat or other cryptocurrencies. 

Brendan Eich, CEO of Brave tweeted,

Following the announcement on March 8, bullish traders responded positively to the update helping the asset bank a further 20% gain. Yesterday however, the price action came up against a tough resistance at the 0.382 fibonacci level ($0.21), and started to correct. Today BAT is currently down 4.12% against the US dollar and flagging 3.61% behind Bitcoin. Can Basic Attention Token pick up where it left off and continue its impressive uptrend, or will the key fibonacci level prove to be too strong for BAT bulls? Let’s take a look.

The Story So Far

On the 1D BAT/USD chart we can see that the asset overall has been tracking inside a descending channel pattern for more than a year now (black lines). Inside the channel, we can also see that the price action consolidated inside a falling wedge shape (light blue shaded area) between April 8, 2019 - February 17, 2019.

The downtrending resistance of the falling wedge shape acted as both a key resistance and support for the asset throughout the last 12 months, and on October 18, 2018, the price action was able to overcome this level during a strong bullish rally.

After breaking out of the falling wedge pattern, BAT briefly threw back onto the level as a new support before taking on the downtrending channel resistance above. On November 7, BAT successfully broke out of the channel but unfortunately the breakout coincided with the Bitcoin Cash war bear market. The resultant crypto market crash caused BAT to unravel all the way back on to its base support, where it continued consolidating back inside the falling wedge pattern.

On February 16, BAT was able to breakout for a second time out of the falling wedge and just like before, threw back on the resistance as a temporary support before pushing on.

Now the asset appears to be trading closely around key fibonacci levels, particularly the 0.236 and 0.382 levels.

The Story Now

Over 4HR candles we can see that the asset is still bearishly correcting after ricocheting off the 0.382 fibonacci resistance.

  • The RSI is currently at 44% and still downtrending towards the oversold region below.
  • The 12 MA has bearishly diverged with the 26MA on the MACD indicator, with big selling candles appearing on the histogram.
  • Candles have fallen through the central MA on the Bollinger Bands, and are closing in on the lower band.
  • The Aroon Down line has bearishly diverged with the Aroon Up line.

From this it can be assumed that the asset will continue to downtrend until the price action finds a strong enough support to recover along.

Despite these bearish signals however, there are a handful of other indicators which suggest the trend is still favourably bullish for now and has not yet bearishly reversed.

  • Parabolic SAR dots are still showing up beneath the price action.
  • The 9 EMA has not yet diverged below the 20 EMA line.
  • There is still a bullish T/K crossover on the Ichimoku indicator, accompanied by a supporting kumo cloud stretching out beneath the price action.
  • The indicator line on the Chaikin Money Flow is starting to flicker upward which suggests buying pressure could be on the rise.

Basic Attention Token (BAT) Price Targets

All ROIs are calculated from the asset’s current value at $0.195 (AToW).

Support 1:  $0.184 (-5.64%)
Support 2: 0.236 fibonacci level/ $0.170 (-12.82%)

Resistance 1: 0.382 fibonacci level/ $0.213 (9.23%)
Resistance 2: 0.5 fibonacci level/ $0.248 (27.18%)

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