Over the weekend, numerous traders pointed out that Bitcoin (BTC) price broke its parabolic upward trend that went back to September. Tech analysts are bracing for a pullout as the dominant cryptocurrency eyes consolidation.
Bitcoin could still see a strong recovery after the weekly close if the rally continues. But it should quickly re-enter the parabola or risk a possible downward correction.
Traders are pointing to USD 15,500 as the key level to maintain the bull run
Since the beginning of September, Bitcoin has been rising continuously without major corrections. Typically, during bull trends, BTC historically saw 20% to 30% declines. There is a possibility that a major pullback could occur if BTC fails to reenter the parabola.
According to the 12-hour Bitcoin price chart shared by the pseudonymous trader “Altcoin Psycho”, BTC has now passed the 2-month parabolic advance.
The trend does not necessarily indicate that BTC would undergo a deep correction in the short term. Rather, it means that a trend may emerge as the markets cool down.
For example, longtime technical analyst John Bollinger said that BTC is likely to withdraw or consolidate. Considering that BTC is floating at the top of the Bollinger Bands, BTC is floating in overbought territory.
But there is always a possibility that BTC could see a stronger rally in a different technical structure in the near term.
The breakthrough of the parabolic upward trend simply means that a new market structure would emerge. Whether this means that there would be a downtrend or that a broader rally would occur remains to be seen.
In the near future, Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said $ 15,500 is key. He said if BTC falls below it, a big correction is possible. He wrote:
“The market in general is at a crossroads of direction. We are breaking below $ 15,500 and I assume we will see a correction in all markets with $ BTC to possibly $ 13,000 or below. “
Due to the uncertainty in the market, technical analysts are generally cautious about predicting a clear short term direction. Chances are, BTC can either continuously rise upward or see a major price drop.
However, if Bitcoin falls below USD 15,500, it would mean that there is a good chance that BTC is testing low support levels.
On the weekly chart, the two major short-term moving averages (MAs) are found at USD 13,967 and USD 12,390. While the weekly chart does not need to revert to MAs, there have been instances in previous bull cycles where the weekly chart retested lower MAs.
The variable is that whales sell BTC
Since November 10, the Gemini exchange has been registering unusually high deposits. This usually indicates that whales are moving to sell their farms to make a profit.
A pseudonymous analyst known as ‘Blackbeard’ said an unusually high amount of $ BTC was transferred to Gemini wallets ”on Nov. 10, referring to CryptoQuant’s on-chain data.
On November 15th Cointelegraph reported, Gemini deposits rallied again, which could lead to increased selling pressure in the near term.
If BTC struggles to recover in the near future, the selling pressure from whales and miners would remain important variables.