Many traders observed that Bitcoin’s price broke its parabolic uptrend over the weekend, which had dated back to September, causing technical analysts to brace for a pullback as the dominant crypto eyes consolidation.
However, despite the weak close, Bitcoin could recover strongly if there is a continuation of the rally but it would need to re-enter the parabola quickly or risk a possible downward correction.
$15.5K is The Key Level
A parabola is described as the curve formed by the set of points in a plane that are all equally distant from both a given line (called the directrix) and a given point (called the focus) that is not on the line. Bitcoin has managed to be in this curve since September by continually rallying without big corrections.
Historically, Bitcoin saw 20% to 30% drops during major bull trends. After the weekend drop in price, there is a likelihood that a large pullback could take place if BTC does not reenter the parabola.
A 12-hour bitcoin price chart was shared by ‘Altcoin Psycho” showing that BTC was out of the 2-month parabolic advance. The parabolic trend does not justify that BTC would see a deep correction but signified that a trend might form as the market cools down.
$BTC *Trigger Warning*
Not saying we dump but…. pic.twitter.com/4W9TJKRB3t
— Altcoin Psycho (@AltcoinPsycho) November 14, 2020
John Bollinger commented that BTC would pull back or consolidate after the price drop. Since BTC is above the Bollinger Bands, it is hovering in the overbought territory.
By BTC breaking the parabolic trend, there is a likelihood that a new market structure will emerge and cause a stronger rally in the near future or cause a downtrend in price.
Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange wrote in a tweet that the market was at crossroads and $15,500 was the key price point.
The market in general is at crossroads of direction.
Breaking below $15,500 and I assume we'll see a correction across markets with $BTC to possibly $13,000 or lower.
— Crypto Michaël (@CryptoMichNL) November 15, 2020
The possibilities price wise for Bitcoin are not certain for technical analysts to make any short-term predictions as there are strong chances for BTC to either continually keep soaring upwards or see a major drop. If the price however drops below $15,500, there is a high possibility for the digital asset to test low support levels.
Whales and Miners Selling BTC
Gemini Exchange has been recording high deposits since Nov. 10 which typically means that whales are selling their holding to take profits. In a tweet, Blackbeard, a pseudonymous analyst wrote on Nov. 10 that an unusually high amount of $BTC has been transferred to Gemini wallets in reference to CryptoQuant’s on-chain data.
— Blackbeard (@crypto_blkbeard) November 10, 2020
Gemini deposits yet again spiked on Nov. 15 which might cause a higher selling pressure in the near future. If BTC struggles to recover its uphill trend in the near future, the selling pressure form whales and miners might remain as significant variables.
Image courtesy of pixabay