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Santiment says the Ethereum-based altcoin Basic Attention Token (BAT) may struggle to keep its momentum after the asset soared 37% to a new all-time high on Sunday.
In a new report, the blockchain analytics firm says that BAT has already shed about 20% of its market capitalization and that the token’s daily active addresses plunged back to 1,217 after hitting the largest single-day address activity of over 3,000 on November 26th.
These factors indicate a lack of fundamental support to provide for another leg up.
“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.”
However, the firm says other indicators suggest that the crypto asset still has the potential to drive up its price this year.
“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.”
Santiment suggests BAT holders are offloading their holdings and this activity may have bullish implications.
“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.”
Currently, BAT is trading at $1.37, down 4.8% on the day.
