How did BAT "sell the news"
Assets covered: Basic Attention Token (BAT)
Metrics used: Social volume, Whales transactions, Network Profit/Loss, MVRV, Active addresses, Mean Coin Age, Mean Dollar Invested Age.
On March 3 Brave acquired a search engine to offer the first private alternative to Google Search and Google Chrome. BAT token price immediately pumped almost 30% and formed a sharp short lived top.
We'd like to show what kind of metrics are usually present under the hood of this well known "sell the news" pattern.
1. First of all it's quite a beautiful setup on BAT social volume:
A sharp social volume decline indicates no more 'blood' left in crowd to support price pump. This is a quite a typical pattern for a top. We've seen this in past many times.
2. Whale Transactions seem to be another top indicator:
Why? Because there’s plenty of examples of major spikes in whale transactions coinciding with local price peak(s), as large investors may look to claim profits and mitigate risk. More details in Dino's insight.
Network profit spikes declining from the price top. Smaller spikes indicating stronger investor confidence. Like "why sell here, it's going to bounce". Price going the other way of course.
You could say that it was such an immediate pump. That it was to be expected. But at the same time pretty much all the signals were pointing to period of profit taking.
MVRV 30d was pretty high. Especially MVRV 60d, we were definitely moving into overvalued territory. And a huge MVRV 365d! It topped almost at the same level as previous price mid February. Nice setup by the way: price tops are different but the actual MVRV stays at the same level.
Overall it's a very nice BAT top formation.
It's the most interesting parts, it has the clearest patterns helping to spot price tops during major project announcements. We obviously wouldn't say there's no potential for another leg up. For example:
5. Active addresses seem to be on a bullish uptick:
A duet of declining slopes indicates distribution is not over yet, BAT can continue it's journey up in midterm.
But for now it seems like there's a set of different red flag for BAT.
With all of this said please keep in mind that coins during the bull market especially have shown a particular resilience even in the case of very concerning indicators. Unlike in the bear markets coins seems to have more of a resilience towards yellow and red flags and their fundamental data. At least in the short term. So even if you see these massive moves on the massively concerning signals it's not going necessarily to immediately tank the price.
Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.