BGB Analysis: Price Drops 17% in 24 Hours After Sharp Surge and Here's Why

Bitget token (BGB) has had an impressive price surge, continuously setting new All-Time-Highs (ATH) almost daily over the past month.

However, recent indicators suggest this uptrend may be slowing down, potentially leading to increased selling pressure as investors reassess their positions.

Bitget token may face selling pressure

The Price DAA Divergence indicator is giving its first sell signal in four months, raising concerns about BGB's ability to maintain its upward momentum. This signal has emerged due to a significant decline in investor participation, as many choose to stand on the sidelines and observe how the market behaves around the new year.

This decrease in participation could reduce BGB's ability to sustain its uptrend. While investor caution is understandable after the substantial gains, it also makes the token more susceptible to short-term corrections, especially if the broader market trend turns negative.

BGB's uptrend is being affected by its negative correlation with Bitcoin, currently at -0.16. This inverse relationship means that BGB's price trajectory is moving in the opposite direction to Bitcoin, a trend that could be concerning if BTC prices continue to rise.

History has shown that BGB has experienced strong recoveries whenever its correlation with Bitcoin improves after hitting a Dip. While the negative correlation poses a short-term challenge, it also presents an opportunity for BGB to diverge and follow its own path based on unique market conditions.

BGB Price Prediction: Returning to ATH

The price of BGB has dropped 17% in the past 24 hours, after gaining 104% in the previous week. This decline seems to be a natural correction following a period of rapid growth and may be accompanied by further short-term adjustments. If the price drop continues, BGB could test the $4.90 support level, erasing a significant portion of its recent gains. This decline could trigger strong profit-taking from investors, putting additional pressure on the Token's price.

However, a strong recovery supported by positive signals from the broader market could push BGB past its current ATH of $8.49. Achieving a new high would invalidate the bearish narrative and signal a new uptrend for the Token, solidifying its position as a prominent leader in the market.

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