News

BitTorrent turned alarmingly overvalued on Monday as its price popped higher by as much as 164 percent quarter-to-date.

The BTT/USD exchange rate surged to $0.013, its highest level on record, after rallying seven days in a row. Every sell-off attempt met with an equally aggressive accumulation, prompting more and more traders to buy the Justin Sun-backed asset at intraday highs. The volumes soared likewise.

BitTorrent rally looks overblown. Source: BTTUSD on TradingView.com

The strong upside move pushed BitTorrent’s Relative Strength Indicator to 94.95, a reading that pointed to an extremely overbought asset. Typically, a higher RSI reading prompts investors/traders to unwind their holdings. As they secure their profits, the asset tops out and falls lower to find its next local support. In a worst-case scenario, it just crashes.

Fundamentals

It isn’t easy to estimate what could happen to BTT/USD. Many analysts agree that the BitTorrent token’s rally has surfaced without any concrete catalyst.

But Joseph Young, an independent cryptocurrency analyst, pointed that Justin Sun’s acquisition of Poloniex crypto exchange alongside other partners, followed by the introduction of BTT staking on the platform, might have boosted the BTT prices. Mr. Sun backs BitTorrent via his key business, the Tron Foundation. The Tron blockchain supports BTT.

Staking takes active token supplies out of circulation. If the demand for the concerned cryptocurrency increases alongside, it tends to increase its bids across spot markets. Earlier, Ethereum’s native token Ether also surged twofold against a similar catalyst.

But BitTorrent is not Ethereum, the project that supports more than 80 percent of the alternative cryptocurrency space atop its blockchain, including decentralized exchange UniSwap and Tether’s stablecoin USDT. That leaves traders in conflict about BTT’s next direction.

Mr. Young also asserted that the BitTorrent price boom has “no clear fundamental catalyst.”

BitTorrent Price Outlook

The maximum risk for BitTorrent moving forward appears to the downside.

BitTorrent eyes correction towards its 20-4H moving average. Source: BTTUSD on TradingView.com
BitTorrent eyes correction towards its 20-4H moving average. Source: BTTUSD on TradingView.com

Traders might unload a portion of their BTT holdings to secure maximum profits. That could push the token towards its next downside target that lurks near its 20-4H exponential moving average (the green wave). If profit-taking intensifies, BTT will fall towards the blue wave target — the 50-4H simple moving average. That would wipe out almost most of the BTT’s 2021 profits.

Meanwhile, a continued pumping phase could risk turning BTT into a bubble that could hurt the latest buyers the most. For now, the token needs a vast correction downhill to neutralized its overbought sentiments.

Photo by Felipe Souza on Unsplash.

Products You May Like

Articles You May Like

New Peer to Peer Exchange Provides Africans with an Alternative to Paxful
Pro traders buy the Bitcoin price dip while retail investors chase altcoins
This Indicator Signals Caution For Bitcoin Holders, Should Bulls Beware?
Charted: Ripple (XRP) Turns Green, Here’s Why The Bulls Could Aim $2
Crypto Derivatives Exchange FTX Starts Offering Lumber Futures Amidst Commodities Price Boom
Marathon Mines First OFAC Compliant Bitcoin Block

Leave a Reply

Your email address will not be published. Required fields are marked *