Basic Attention Token (BAT/BTC) continues to drift lower against Bitcoin, having broken down in October below a long-term support level and setting new a new multi-year low. The BAT/BTC chart is extremely bearish, and while BAT holders' bags are the heaviest they have been since 2017, there may yet be opportunity in the dark.
(November 12, 2020 3:00 PM EST)
Outlook: BAT/BTC is at its lowest point in nearly four years, hovering just above 0.00001 as I type this. While Bitcoin's recent rally to upwards of $16,000 has been a boon for any Bitcoin holders or crypto enthusiasts anywhere, the inherent inverse BTC-Alt dynamic has siphoned life from altcoins and funneled it directly into Bitcoin. This dynamic is not new, and was extremely evident in the 2017-2018 crypto bull market when Bitcoin rallied to new ATH's in December 2017, only to then top out and pull back a bit, allowing altseason to begin in late December and alts to go parabolic in satoshi value into January 2018. What we're likely seeing now, especially in BAT/BTC, is Bitcoin rally in the early stages of a bull market, which is having adverse effects on alts' BTC value, satoshis (or "sats").
However, anyone who is famillar with the utility of BAT, its creators, the Web3 Brave browser it's already actively used in, or its public adoption, which is quantified by its rapidly increasing Monthly Active Users metric which just recently crested 20 million MAU's. Obviously, BAT has value and is backed by a legitimate, functioning project that has not only successfully launched but is growing at a steady pace. Fundamentally, BAT is an extremely strong and promising project with high upside and limited downside.
To me, this chart screams 'long-term buying opportunity.' While BAT may not have yet found its bottom in this cycle or Bitcoin its top, BAT's downside is limited. As it flirts with its 4-year cycle low, you can see in the chart above that BAT has spent almost all of its time between 0.00002 and 0.00005 BAT/BTC, or 2-5x its current price. Given BAT's strong and growing fundamentals and stretched technicals, it's a pretty good bet that BAT will at least return to the mean at some point in the next year or so.
Assuming BAT can return to the 0.00005 BAT/BAT level last seen in the beginning of the 2018-2020 bear market, which would be an understatement given how BAT has gone from a speculative test project to a fully-launched main net product with 20+ million global users, there's a realistic probability that BAT can match or even exceed its 2018 peak. Even with conservative price projections, we estimate that BAT is currently in an extremely advantageous position to rise multiples from today's price levels, if not exponentially.
Support: Look for support at 0.00001, which is a large, round psychological number and roughly the December 2017 lows. BAT is stretched to the extreme downside; there should not be anyone selling down here in the gutters, only buyers.
Resistance: Look for resistance around 0.00002 which is a historical long-term support level and just below the 50 Week EMA. Above that, 0.00003 has been the upper band of a large sideways channel since mid-2019. Above there, look for resistance every 0.00001, namely 0.00005. From a long-term perspective, my minimal upside target would be 0.00005, and then higher from there.
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