After last week's ATH, can $BAT take flight again?

It's the end of 2021 and Basic Attention Token (BAT) is one of the top performing coins of the week (+31.6%). Just as we all predicted, right?

The coin hit a new price all-time high of $1.85 on Sunday, despite growing concerns about the impact of Omicron on BTC and the wider crypto market.

BAT has struggled to keep the momentum since, shedding some -20% off its market capitalization in the past 72 hours. Is there more juice in the tank? Let's see what the coin's on-chain and social activity can tell us.

The amount of addresses interacting with (i.e. sending or receiving) BAT has soared during last week's rally, peaking at 3354 on November 26th.

Over the past 6 months, BAT's daily addresses have typically meandered between 800 and 1100 on a good day. Excluding another short-lived spike at the end of October (also pump related), November 26th saw the largest single-day address activity for BAT since early May, suggesting renewed interest in the coin on-chain:

What is worrying about BAT's short-term prospects is that its network-level activity has largely reset back to default over the past 4-5 days. At the time of writing, BAT's daily active addresses slumped back down to 1217, which may signal a lack of fundamental support for another leg up.

It's worth noting that 1200+ daily addresses would still probably put BAT in the top 15 most active coins on Ethereum, but still - trends matter.

In a similar vein, we see the number of new addresses interacting with BAT skyrocketing on three separate occasions this month (around local price tops) but flopping soon after, suggesting a lack of network-wide support for a prolonged rally:

This, of course, doesn't necessarily mean that BAT's done for the year, but it'd be nice to see a more consistent rise in network-level metrics, which would signal a sustainable uptick in BAT-related interest and demand on the blockchain.

That said, not all network-level metrics for BAT look bleak. For instance, BAT's Mean Dollar Invested age has started to slope downwards for the first time since May, suggesting that we may be in the midst of another redistribution cycle for the coin:

Mean Dollar Invested Age (MDIA for short) was initially developed by Santiment back in 2019, and it's more simple than it may sound. For each unit of BAT, we determine how long it has stayed in its current address, compute the average of all those ‘ages’, and adjust it by the price at which each unit was last transacted on the blockchain.

Put simply, a rising MDIA slope points to a period when BAT coins are - on average - getting 'older', i.e. not actively moving between addresses and may signal network-wide dormancy. On the other hand, a declining MDIA slope suggests a rapidly declining average ‘age’ of BAT tokens, or a network-wide redistribution effort.

As you can see above, several of BAT's rallies over the past 4 years have coincided with a significant drop in its MDIA, as the network jolts back into action and redistribution takes place between key stakeholders. Once MDIA starts sloping back upwards, it may signal the end of redistribution and a pivot back to dormancy - and, as a result, a potential end to the rally.

This is not endemic to BAT, either - we can see very similar patterns in Bitcoin's Mean Dollar Invested Age over the coin's history.

Finally, it's also worth noting that a LOT of profit taking seems to be occurring in the past few weeks. The amount of BAT moving to exchanges has been on a considerable uptick since the rally started, signaling a potential rise in short term sell-side pressure for the coin:

Along the same lines, the amount of deposit addresses (used to funnel BAT to centralized exchanges) has exploded around each of BAT's recent price tops, as holders looked to offload some of their bags and reduce exposure:

While not ideal for its short-term PA, strong profit-taking activity can signal a lack of wholesale confidence in BAT's future price potential, and that kind of uncertainty may help provide support for another leg up. Our social metrics also suggest that BAT-related sentiment is quite low at the moment, even with the coin outperforming 90% of the market in the past 7 days.

Ideally, we'd see some signs of growth in BAT's address activity in days to come, to go along with these (as of yet) tempered crowd expectations. Assuming the price continues to decline from here, that could mark a nice bullish divergence for the coin.

Thanks for reading!

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