The price of browser startup Brave’s Basic Attention Token (BAT) fell by as much as 20 percent in the past 24 hours.
Trading for BAT officially went live yesterday on Coinbase, the largest cryptocurrency exchange in the U.S., a move that followed the token’s inclusion on Coinbase’s professional platform.
Coinbase initially teased the idea of listing BAT among four other cryptocurrencies on July 13, triggering a 27 percent jump in its price at the time. BAT was able to reach a 3-month high of $0.45 just 11 days later.
Yet as of press time, BAT is trading at around $0.30, representing a 23 percent decline from than yesterday’s high of $0.39.
BAT/USD Daily chart
As can be seen in the above chart, the price of BAT broke above its upper Bollinger Band and hit a three-month high of $0.39 following the Coinbase listing news, though it quickly retreated.
In technical analysis, a price extending above its Bollinger Band is usually a sign of overextension. When combined with an overbought relative strength index (RSI), a pullback becomes more likely as a result.
Given yesterday’s bearish candle close, it’s possible that BAT’s descent is not complete. The middle of the Bollinger Band – known as the basis (middle red-line) – can now be looked to for short-term support.
Falling below the basis would set scope for a further drop to the bottom Bollinger Band where support confluence with the 0.618 Fibonacci lies near $0.22.
Selling the news?
It’s worth noting BAT’s bearish reaction from the market, following its listing on Coinbase, is not the first time a similar situation has taken place.
ZRX and ETC were two other cryptocurrencies added to the exchange this year that were met with initial investor enthusiasm but fell shortly after their official listing on the exchange.
ZRX became the most recent addition to Coinbase when it was listed on October 16th. Its price rose to an 8-week high of $1.09 the next day, but it began a steep descent thereafter.
Today, ZRX is trading at a price of $0.72 on the Binance exchange, representing a 33 percent drop from its post-Coinbase listing high.
In the frame below, the price action of ETC tells a similar story. The cryptocurrency hit a high of $15.09 on Aug.16, the day of its listing on Coinbase, but just a week later it was trading at a 20 percent lower price. Today, ETC is trading on Binance at a price of about $9.55, marking a 37 percent drop from its Aug. 16 high.
- BAT looks to be another victim of the “buy the rumor, sell the news” trading strategy following its listing on Coinbase.
- Yesterday’s bearish daily close hints at a further pullback in the coming days towards the Bollinger Band basis line where it may find temporary support, currently located at $0.28.
- Finding acceptance below the basis would set scope for a drop to the bottom band where the 0.618 Fibonacci retracement lies near $0.22.
Disclosure: The author holds BTC, AST, REQ, OMG, FUEL, 1st and AMP at the time of writing.
Market chart image via Shutterstock