BAT’s Consolidation Could Soon Come to an End [Premium Analysis]

Highlights

• There is major support at 2200 satoshis and major resistance at 3200 satoshis.
• The price is consolidating inside a minor range of 2400-2700 satoshis.
• It is possibly accumulating based on the Wyckoff distribution method.

Full-time trader @CryptoMichNL outlined a BAT price chart, stating that if the price manages to hold on to the 2400 satoshi support area, it could head towards 3200 and 4000 satoshis.

$BAT #BASICATTENTIONTOKEN

This one starts to look nice.

One a very big support here and bouncing upwards + potential wedge structure.

Holding 2400 could open doors towards 3200 and 4000 satoshis.

Losing 2400 and I'm aiming 2250 again. pic.twitter.com/Ai84CudEFb

— Michaël van de Poppe (@CryptoMichNL) January 22, 2020

Let’s take a closer look at the price movement and attempt to determine its future direction.

BAT Price Breakout

The BAT price had been following a descending resistance line since November 17, 2019. The price broke out above this line on December 28. However, the breakout was short-lived and the price returned to validate the breakout line shortly afterward. On January 14, the price created a bullish engulfing candlestick and began the upward move that is still ongoing. Currently, the price is stuck between minor support and resistance areas at 2400 and 2700 satoshis, respectively. As stated in the tweet, a breakdown below 2400 satoshis would likely take the price to 2200 satoshis.

Wyckoff Accumulation

The BAT price movement resembles accumulation as described by the Wyckoff method. The first touch of 2000 satoshis was the “Selling Climax”, after which an “Automatic Rally” followed. Afterward, the price did the “Secondary Test” and began an upward move, from which it is currently retracing. A possible low of 2400 could be the “Last Point of Support” after which the BAT price breaks out above this range (Show of Strength) and heads towards 3200 satoshis. There is another slightly more bearish version of this accumulation, in which the price creates a “Spring” slightly below the “Secondary Test” and support area of 2200 satoshis before continuing its upward movement. If the price does that, the 2200 satoshi support area would offer an ample opportunity to enter the trade in anticipation of the ensuing upward move.

BAT Future Movement

While not by much, the first scenario seems more plausible. The BAT price is likely in an uptrend since January 14, as evidenced by its position above the 200-hour moving average (MA), and the fact that the RSI has been above the 50 line for the majority of this accumulative period and is seemingly using the line as support. Therefore, we believe the price will hold above 2400 satoshis and begin an upward movement towards the range high. To conclude, the BAT price has broken out above a significant resistance line but has failed to resume its upward movement. The price movement resembles an accumulation phase, after which a breakout towards 3200 satoshis is likely to ensue. A price increase above the current range high of 2700 satoshis is expected to accelerate the rate of increase.