Popular torrent and decentralized file-sharing platform BitTorrent (BTT) went through a roller coaster ride this week. After reaching a high of $0.0134 on Monday, the token crashed to a low of $0.0074 on Wednesday. It is now recovering and is currently trading at $0.0089. BTT reached its all-time high after rallying for 7 days straight.
The rally also took BTT valuation past the $5bn-mark, making it the 23rd most valuable cryptocurrency per market cap. At present, BitTorrent has a market cap of $5.8 billion. RSI for BTT is 71.91, which is borderline overbought.
BTT powers the peer-to-peer file-sharing network BitTorrent and operates atop the Tron blockchain as a TRC-10 token.
What pushed the BTT joyride
The reason(s) behind BitTorrents rally is not lucid. Financial Analysts concur that there is no underlying catalyst behind its explosive growth. Nevertheless, the token was on the rise since mid-March, before yesterday’s crash.
Independent cryptocurrency analyst Joseph Young highlighted factors that could have been responsible for BTT’s rise. Justin Sun, the owner of BitTorrent, was one of the buyers who acquired crypto exchange Poloniex from the fintech firm Circle. Poloniex later announced BTT staking on its platform. These factors may have helped escalate BTT prices.
Traders, banking on BTT’s growth, went into a buying spree. But they got a rude shock as the altcoin dropped by almost 40%. One of the reasons for this was profit-taking by the buyers. Apart from this, BTT had an RSI of around 91% prior to the crash, which may have prompted price corrections.
Further Drop Feared?
BTT has recovered after its crash yesterday, but the future is still uncertain. Lack of clear bullish catalysts may prove detrimental for it in the long run. There is a risk that the token could turn into a bubble. Another rally might push buyers to offload their holdings to secure profits, resulting in massive losses for traders buying at the peak.
Photo by Mark Basarab on Unsplash
A Delhi based content writer, I did my bachelors in engineering with major in electronics and communications. I first heard of bitcoin while writing an article about blockchain technology a few years back, and have been following it ever since. Bitcoin may well be current big thing happening in the finance industry, and it feels like the right time to join the crypto bandwagon.
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