Over the weekend, numerous traders pointed out that Bitcoin (BTC) price broke its parabolic upward trend that dates back to September. Technical analysts are bracing themselves for a retreat as the dominant cryptocurrency looks to consolidate.
Bitcoin could still see a strong rebound after the week’s close if the rally continues. However, it would have to re-enter the parabola quickly or risk a possible downward correction.
Traders set $ 15,500 as the key level to keep the bull run going
Bitcoin has continuously recovered since the beginning of September without major corrections. During the bull trends, BTC typically saw a 20% to 30% decline. There is a chance a major retreat will occur if BTC doesn’t re-enter the parabola.
According to the 12-hour Bitcoin price chart of the pseudonymous trader “Altcoin Psycho”, BTC no longer has the parabolic advance of 2 months.
The trend doesn’t necessarily suggest that BTC would see a profound correction in the short term. Rather, it just means that a trend could develop as the markets cool down.
For example, longtime technical analyst John Bollinger said that BTC is likely to pull back or consolidate. Given that BTC is floating at the top of the Bollinger Bands, BTC is floating in overbought territory.
However, there is always the possibility that BTC could see a stronger rally in a different technical structure in the short term.
The break of the parabolic uptrend simply means that a new market structure would arise. Whether this means a downtrend or a wider rally would occur remains to be seen.
In the foreseeable future, Michael van de Poppe, a full-time trader on the Amsterdam Stock Exchange, said that $ 15,500 is holding the key. He said if BTC falls below that, a big correction is possible. He wrote:
“The market is generally at a crossroads. If we drop below $ 15,500 and assume we will see a correction across the markets with BTC of possibly $ 13,000 or less. “
Technical analysts are generally cautious about predicting a clear short-term direction due to the uncertainty in the market. There is a high probability that BTC will either rise steadily or see a sharp fall in price.
However, if Bitcoin falls below $ 15,500, it means that the likelihood that BTC will test low support levels is high.
On the weekly chart, the two main short-term moving averages (MAs) are at $ 13,967 and $ 12,390. Although the weekly chart does not need to be traced back to MAs, there have been instances in previous bull cycles where the weekly chart retested lower MAs.
The variable is whales selling BTC
Since November 10th, Gemini Exchange has seen unusually high deposits. This usually indicates that whales are selling their stocks to take profits.
A pseudonymous analyst named “Blackbeard” said on Nov. 10th that an unusually large amount of $ BTC was transferred in Gemini wallets, referring to CryptoQuant’s on-chain data.
As Cointelegraph reported, Gemini deposits rose again on November 15, which could lead to higher selling pressure in the short term.
For the foreseeable future, selling pressures from whales and miners would remain important variables if BTC struggles to recover.