Bitget Token [BGB] spikes 16% past $5 – But one RISK remains!

Key Takeaways

BGB surged 16%, outpacing peers, yet concentrated token distribution raised centralization risks. With traders favoring longs over shorts, is bullish conviction strong enough to override governance concerns?

The price of Bitget Token [BGB] spiked above the $5 mark after a surge of 16% surge on the 2nd of September. These daily gains eclipsed the weekly returns, which were up by only 5%.

What fueled the surge? A mix of fundamentals and hype.

Bitget recently rolled out Chainlink’s [LINK] Proof of Reserve, boosting trader confidence in the transparency of exchange-backed assets.

In addition, ongoing token burns have significantly reduced market supply, adding further support to price stability.

Can BGB price reclaim $5?

On the charts, BGB briefly touched $5.44 before pulling back. The hourly chart showed a clean gap from $4.81 to $5.13, breaking through resistance at $4.81 and establishing a new support near $5.

If BGB maintained this momentum, bulls could eye $5.82 as the next hurdle, which might open the path toward $6.

On top of this, technical signals backed the surge.

For instance, the MACD was super bullish after sellers dominated since the 27th of August. Also, the RSI rose to the oversold territory near 67, at press time, but briefly declined below these levels.

The cooling of the RSI indicated that buyers could continue taking prices higher.

Source: TradingView

However, a failure to hold above $5 could send BGB back into range-bound action, much like its consolidation phase after the 13th of August.

Holder distribution raises red flags

According to CoinMarketCap, BGB’s holders reached 20,530 as of the 2nd of September. Yet, nearly 72% of the supply sat in just 10 wallets, with the largest alone holding around 22%.

This imbalance in the token distribution posed a risk of price manipulation. Usually, safe tokens for trading have participants holding 2 – 3% of the total supply.

Source: CoinMarketCap

Still, if whales opted to sit tight, the squeeze on circulating supply could continue to fuel the rally.

Longs dominate Derivatives bets

Meanwhile, the Liquidation Map from CoinGlass showed that high leveraged longs of 25x and 50x were clustered between $4.44 and $5.20. This indicated that traders were betting more on longs, despite the risk.

At the same time, cumulative Long Liquidation leverage stood at $38.77 million, as of writing, which is over 6x higher than shorts at $6.85 million. Short clusters were thinner, with fewer liquidations visible beyond $5.44.

Source: CoinGlass

Naturally, this setup hinted at more room for upside pressure. Yet, with token ownership skewed toward a handful of whales, the risk of sudden volatility remained.