Can Basic Attention Token (BAT) Lead the Rally out of this Bear Market?

BAT, or the Basic Attention Token – which wildly gained a lot of attractive due to its focus on privacy and protection from invasive advertising in the form of a browser called Brave, that rewards you for watching advertisements in the form of a crypto token. And it has been pretty successful at that, garnering a lot of support from the crypto community at large. It basically holds the promise for a true Web3 economy and has taken one of the first definitive steps towards it.

Its token, however had fallen victim to the bearish nature of the broader market ever since it touched its all time high back in November 2021. But of late, it seems to be improving slightly on the back of positive news and recovering market sentiment.

BASIC ATTENTION TOKEN (BAT): A TECHNICAL OVERVIEW

BAT/USD | Source: Tradingview

Looking at the charts, one can easily identify some points of optimism. Since the beginning of July, BAT prices have managed to break out of the trendline resistance (marked in orange) and the 50-day moving average. Technically speaking, this hints at some positive momentum in the immediate short term. However, it still remains very far away from the 200-day moving average which would signify a change in the long-term bearish trend.

Along with that, the Relative Strength Index, currently just below 60 is at a good position to support any bullish price action that may play out in BAT going forward.

However, it must be noted that BAT will face some stiff resistance in the $0.65 to $0.8 region (marked in purple), which also coincides with the 200-day moving average. This would be a difficult supply zone to break out of, but if the prices are able to sustain above this convincingly, the next would be around $1.4 and then eventually the all-time-high of $2.

Check out latest BAT Price, Charts & Data.

ARE BAT INVESTORS PROFITABLE?

Well according to data from IntoTheBlock, out of the nearly 430k investors in BAT, over 55% of BAT holders managed to be profitable despite being over 75% down from its ATH. A little less than 200k investors were seeing red on their books, which is less than half of those still profitable. And all things considered, the ratio is much better than the likes of most other larger market cap coins like Cardano, Shiba Inc and even Bitcoin for that matter.

Investors in Profit | Source: IntoTheBlock

The area marked in green marks the amount of investors sitting on profits, the grey zone indicates those who are at break even and the red region marks the number of investors seeing losses in their books.

Additional Read: What is Crypto Bear Market?

WHAT TO ON-CHAIN VALUATION INDICATORS SUGGEST?

NVT Ratio, or the Network Value to Transactions ratio is something that described the relationship between the Market capitalization and transfer volume on the blockchain. As per Willy Woo, the creator of this ratio, NVT can be considered to be analogous to what is known as P/E (price to earnings) ratio in traditional equity markets.

A high NVT Ratio indicators investors are pricing a particular crypto at a premium as market cap growth outpaces the actual utilisation of on-chain transaction volume. While a low NVT Ratio indicates that investors are pricing the crypto at a discount. High NVT Ratios typically tend to indicate market tops during period of overvaluation while lower NVT Ratios indicate market bottoms during bull markets. A constant NVT Ratio on the other hand suggests that market cap growth and transfer volume growth are happening in tandem and the uptrend is sustainable.

NVT Ratio | Source: Messari.io

From the chart above, we can identify that there have been moments where NVT spiked, but currently is around an average value when you look at the historical. So, considering the cheap prices and attractive valuations, BAT may pick up the pace, if the broader market sentiments support bullish action.

CONCLUSION

So drawing inferences from the above points, one can easily conclude BAT is well up there on the list to be one of the first coins to lead the rally when the crypto market begins to recover from its lows. So far the time hasn’t come yet and the crypto winter has set in well. However, when the ice begins to thaw, BAT would surely lead the race given its strong fundamental project idea along with positive community and investor support even in difficult times such as this.