- Death cross looming on the daily BTT/USD chart
- Combination of ascending channel setups
- Bitcoin eyeing a correction towards the $30,000 price level
JAIPUR (Coinchapter.com) – BTT may be trading sideways against the US dollar, but it’s in quite some hot mess. Peer-to-peer file transfer protocol BitTorrent’s native cryptocurrency token is looking at a significant downside correction from the current price levels. Here’s why.
Death Cross Haunts BTT
For starters, the BTT/USD trading pair is set to face a ‘death cross’ moment in the near term. Death crosses are scenarios where the 50-day MA wave intersects the 200-day MA wave and crosses over.
The bearish technical setup has historically preceded numerous price correction events, especially for Bitcoin. For instance, a death cross occurrence on BTC daily technical charts (in mid-June) preceded a 30% correction in prices (from $41,378 to $28,611).
BTT’s momentum indicates an entry into the Bollinger Band squeeze zone. And in the absence of significant buy pressure, weak RSI and MACD indicators, combined with a looming death cross, a retracement from current spot rates is almost inevitable. The following reason will quantify the degree of correction in prices.
Also Read: BitTorrent goes into conflict mood over choppy trend—what’s next for BTT?
Ascending Channel Technical Setup Combo
Since achieving a new all-time high at $0.0135, BTT has gone through a series of price corrections. A descending triangle pattern defined the BitTorrent token’s price action after the ATH. With spot rates breaking below the triangle support owing to intense selling pressure. A 66% drop in prices pulled BTTUSD from the $0.0071 level to $0.0024.
Recovery after the significant correction was cut short by another bout of bearish momentum that bounded the BTTUSD pair in another descending triangle formation. Finally, the triangle support violation caused a 43% retracement that pushed BTT spot rates down from $0.0035 to $0.002.
BTT’s price action confines it within a bearish pennant with spot rates already testing the lower bounds of the pattern. Since a bullish presence is almost negligible, the 60th largest cryptocurrency (by market cap) risks giving in to the pattern. Price corrections would be to the tune of 25%, from current spot prices at $0.0024 to $0.0018 (which has acted as critical support for almost the last month.
Also Read: BitTorrent bears could crash BTT by another 40%—3 reasons why?
Tracking Bitcoin
For the last 30 days, BTT has traded in almost 80% correlation with Bitcoin prices. However, BTC markets are currently pretty shaky, with spot rates looking to revisit the $29,000 – $30,000 support range.
Bitcoin’s RSI is gradually rising, but the benchmark cryptocurrency still lacks aggressive buying pressure. Plus, volatility is at a multi-month low. BTC’s momentum since that May fall has followed an ascending triangle pattern, with spot rates currently testing the triangle support.
Lack of positive volatility could cause short-term holders to lose interest in Bitcoin markets, which in turn could trigger selloffs. In the stated case, BTC again risks dropping down to the $30,000 support. And since BTT is nearly 80% correlated with the top cryptocurrency’s market momentum, the token will follow suit and drop down lower.
Himadri is an active investor in cryptocurrencies and upcoming blockchain technology projects. He has been a part of the digital asset space since 2017 and has held multiple positions as Social Media Manager, Assistant Editor, Sponsored Content Manager, Cryptocurrency Journalist roles in reputed news outlets like NewsBTC, Bitcoinist and CryptoPotato. He has also helped numerous blockchain projects gain prominence through terse and succinct marketing/technical content. Himadri comes with a marketing and engineering background, and has worked with reputed names such as GE Healthcare, Volvo Trucks and Polycom before moving into crypto.
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