- 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.
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.
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.