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BIT Price Defies Overbought Conditions After Rallying 136% To $0.6 – Time To Buy?

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BitDAO continues to display strength in 2023, earning a spot among the best-performing altcoins in the New Year. The BIT price has recorded higher highs and higher lows since January 21 printing mostly green candles. The token, which focuses on building a decentralized token economy, boasts 136% in cumulative year-to-date gains to hit highs around $0.60 on Tuesday.

What Is Fueling BitDAO’s Explosive Bullish Move?

BIT price appears to have bottomed at $0.25, ending a lengthy downtrend that defined the crypto market for most of 2022. As the price of the BitDAO token snapped out of the ‘gravitational’ pull investors rallied behind it to take advantage of a possible uptrend in 2023.

Interest in the token spiked following key developments news at the end of last year. According to recent news, the development team was considering buying back $100 million in BIT tokens in December through a BIP-18 proposal. 

Voting on BIP-18 started on December 24. On January 1, the BitDAO community announced that the proposal passed paving the way to set a Target Daily Purchase Amount (TDPA) at $2 million USDT per day starting January 1, 2023, for 50 days.  

This proposal was aimed at prioritizing BitDAO capital deployments with a higher focus on $BIT products and a lower attention on swap and investments as well as yield strategies. BitDAO currently holds assets to cover at least five years of BIT product development.

This initiative has been supported by Bybit, the Singapore-based crypto exchange, which said that it had made a $35 million contribution in BIT to BitDAO between December 1 and 31. The crypto trading platform reiterated its commitment to make “recurring contributions” stating that the contributed BIT tokens were sent to a burn address as per the BIP-14 proposal. 

Is The BIT Price Still Profitable?

After consolidating between $0.25 and $0.35 for more than six weeks, the BIT price bounced off the lower boundary of this price range to stage a 136% uptick to hit a high of $0.6 during Tuesday’s trading session. 

During this rally, the price recorded a series of higher highs and higher lows leading to the appearance of an ascending parallel channel on the daily chart. As long as BIT remains within the channel, its value is set to continue growing.

As such, a daily candlestick close above the immediate resistance at $0.60, embraced by both Tuesday’s high and upper boundary of the governing chart pattern would see the price rise higher to tag the $0.68 local high. 

In highly ambitious cases, the price of BitDAO’s native token may climb higher toward the $0.80 psychological level. Such a move would represent a 43% ascent from the current levels. 

BIT/USD Daily Chart

BIT Price Chart Jan 25
TradingView Chart: BIT/USD

The 50-day simple moving average (SMA) and the relative strength index (RSI) were tipping upward, a sign that the market still favored the buyers. This optimistic outlook in BitDAO price could be the reason why traders are ignoring the extremely overbought conditions, as seen with the Relative Strength Index’s (RSI) position at 74. 

In case declines catch up with the BIT price,  investors would be looking to cash out on short positions placed below the lower boundary of the prevailing chart pattern at $0.05, the $0.41 support level recently flipped from resistance, and the 50-day SMA at $0.38. 

Below this level, the BitDAO price will retreat toward the upper boundary of the consolidation zone at $0.35 with a possibility of dropping back to the zone support provided by the lower boundary of the territory at $0.25. Market participants could expect BIT to take a breather here before staging a comeback.

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