Technical analysis is an important aspect of investing and even more important to trading. It isn’t an exact science, but it can help to increase probabilities by watching for chart patterns on altcoins like Ethereum, Cardano, BAT, Binance Coin, and others.
But not all chart patterns have names or follow geometrical shapes. Some moves are designed to be erratic specifically to confuse and ultimately shake traders out of positions. One crypto analyst who offers the community wealth of trading tips has outlined the exact anatomy of an altcoin shakeout, using the cryptocurrency BAT.
Altcoin Shakeout Explained By Crypto Trading Vet
Financial markets are whale and shark-filled waters ready to devour new investors and traders and tear apart their hopes, dreams, and capital.
Investing in cryptocurrencies can be a wild ride. Trading is an entirely different story. Yes, with time, skill, and patience, money can be made, but it is far more difficult than it looks.
Still, some make it look easy, and are in a position to educate others. One such crypto analyst with a wealth of knowledge shared for free on his pinned Twitter threads has recently shared what they call an anatomy of a shakeout in altcoin BAT.
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The asset recently pumped, but not before a fake out move down to, as the analyst says, shake traders out of position. As the trader explains, before the big move is about to happen, low timeframe price action becomes erratic. This is when you may see those dreaded Darth Maul candles or “Bart moves.” This causes “people to start second-guessing their position.”
Next, price “nukes” as the crypto community calls it, causing panic selling and positions to get flushed. Just as stops are hit, and fear starts to take hold in the unprepared, price rockets higher through former support and then through resistance, full “send.”
Basic Attention Token BATBTC Anatomy of A Shakeout | Source: TradingView
What’s Up With BAT And Its 40% Rally Over 48 Hours?
This shakeout is exactly what happened on the BATBTC trading pair over the last 48 hours, prompting a full 40% rise in USD value. But why is BAT suddenly spiking?
The great crypto capital rotation also called an altcoin season, is still on. BAT just so happened to be among the last assets to pump. Those that have come last have also pumped the hardest.
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BAT, OMG, and other older crypto coins recently exploded in value over the last two days, for no real reason other than it was their time to break out.
What little money was coming in, was enough to push price action through resistance and cause a wave of FOMO.
BAT was also among the list of Coinbase crypto tokens that performed the worst out of the over 57% average return, with just 5%. The recent pump in Basic Attention Token has brought the asset much more on par with the rest of the crypto tokens that were part of that previous figure.