Basic Attention Token (BAT) is widely known for its integration with the Brave browser and its ad-free experience. However, BAT appears to be losing its luster as it is heavily influenced by overall market sentiment. As a result, the altcoin has lost more than 60% of its capitalization since its price hit an all-time high in late November.

Technically, the price is in a very fragile position near the bottom of the descending triangle. Moreover, the price is quite far below the 50 and 200 DMA. BAT is also seeing weak volume and the RSI has not yet reached the oversold territory. Therefore, a further reduction cannot be ruled out from here.

Accordingly, a break below the descending triangle’s critical support could trigger a sharp downtrend in the absence of significant support levels next. So, observing the price action, unless there is a shift in overall market sentiment, BAT’s future looks bleak.

At the same time, BAT needs to sustain a rally above all immediate resistance levels.

BAT/USDT | source: trade view

However, the on-chain indicators for this coin offer mixed views. For example, according to data from Santiment, the MVRV-Z-Score shows a good value for money purchase of BAT. Thanks to the downside move and bullish outlook, the MVRV-Z-Score appears to be in a good position as an entry point for short-term gains.

MVRV Z Score | source: Mood

As a result, the percentage of top addresses in BAT’s total offering is growing relatively steadily. This shows the longtime HODLer’s confidence in the coin. It is also important to note that despite the catastrophic fall in market cap, the indicator is still climbing higher.

Offer from top addresses (in % of total supply) | Source: Santiment

However, not all indicators are optimistic. Basic Attention Token network growth slows down and hits a 9-month low. “Participants seem to be losing confidence to continue building and poor price action is one of the many reasons leading to this.

network growth | Source: Santiment

The NVT Ratio has increased several times over the past few days even as prices have fallen. The NVT ratio is the ratio of market capitalization to the value of an on-chain transaction. This case shows the possibility of trading with reduced volume despite the low market capitalization.

NVT Rate | Source: Glassnode

In addition, according to Glassnode, the number of active addresses on the blockchain is also affected by the price drop. It is at one of the lowest points since late 2018.

Active address number | Source: Glassnode

So overall, while there is some upside, a combination of technical indicators and metrics seem to be pointing to an overall bearish bias. Therefore, continuing a short BAT position may be the most viable way to profit in the short to medium term until the overall crypto market recovers strongly.

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