- BTT 4h chart and the rising wedge formation
- Descending channel on the daily chart still holding
- Similarities with other coins.
YEREVAN (CoinChapter.com) — BitTorrent (BTT), a utility token on the Tron blockchain, could eye further losses, as it broke out of what appears to be a classic bearish reversal pattern.
BTT 4h chart shows a rising wedge formation
The BTT/USD exchange rate stood at $0.00269 in the early European session Tuesday as it broke out of a so-called Rising Wedge structure.
Rising Wedges appear when an asset trades upward, inside an ascending range that begins wide and contracts as the price rises. Eventually, the price breaks out of the range, typically to the downside, to approach profit targets located below the maximum distance between the Wedge’s upper and lower trendline.
The BitTorrent token has been in a similar structure since June 22. As a result, the BTT/USD exchange rate risks crashing by as much as 25 percent to $0.00195 in the coming sessions.
The outlook is that much bearish on a larger scale as well. The downtrend looks plausible on the daily chart in a descending channel formation.
BitTorrent’s descending channel
BTT long-term charts exhibit a descending channel formation.
Descending channels form when a price trends lower while fluctuating inside a parallel range. Traders tend to place bearish trades when the price hits the upper trendline of the Descending Channel. Conversely, they open bullish positions on a pullback from the lower trendline. But all and all, the price keeps declining lower.3:51So it seems BTT has been trading in a similar downside setup since April 24.
BTT’s resilience to break upward of the Descending Channel resistance also doubles down due to an additional resistance confluence in the form of a 20-day exponential moving average (20-day EMA; the purple wave in the chart below).
The descending channel by itself does not suggest a solid continuation bias. It simply restricts the trading of the token, until it manages to break out in either direction. Combined with the rising wedge formation, the charts could suggest a possible downtrend back into the channel, all the way to the mid-range. BTT could lose as much as 43 percent if bears take over, dropping back to the $0.00149 price target.
BitTorrent is not unique in regards to descending formations on the daily chart. Many smaller tokens are mimicking the ubiquitous trend throughout the market.
Descending channel formations across the market
Bitcoin (BTC) itself and several other altcoins are trading within similar patterns. The alpha crypto that could set the stage for the altcoin market, consolidated within the range of the channel, retesting both trendlines multiple times since mid-May.
Other altcoins like Ripple’s XRP, Holo, and Dogecoin all follow a similar long-term pattern. Looks like Bitcoin is setting the tone for altcoin trading at the moment. The bias on minor altcoin charts could also depend on the flagship crypto.
For example, when the alpha crypto lost 36 percent of its value in May12-19, BitTorrent followed and shed 49 percent. Similarly, when Bitcoin declined by 22 percent from the June 15 value of $40,487 down to $31,640 on June 21, BTT went down with the ship. The token lost 43 percent in the same period, sliding down to $0.0020.
Unless the leading cryptocurrency manages a bullish break, BTT could tag along in a similar pattern.