Bitcoin price drops below $15,500 level in parabolic uptrend: ‘critical’

Over the weekend, many traders noted that the price of Bitcoin (BTC) broke down from its parabolic uptrend that it had been in since September. As Bitcoin is in a consolidation phase, technical analysts expect a pullback in Bitcoin.

If Bitcoin continues to rise, it could still have the potential to stage a strong recovery after the close of this week. But it needs to re-enter the parabola quickly or risk a downward correction.

Traders point to $15,500 as key level to sustain bull run

Since the beginning of September, Bitcoin has continued to rise without a significant correction. Typically, during a bull trend, Bitcoin historically falls by 20% to 30%. If Bitcoin fails to re-enter the parabola, a significant correction is possible.

According to a 12-hour Bitcoin price chart shared by anonymous trader “Altcoin Psycho,” Bitcoin has broken out of its 2-month parabolic rally.

This trend does not necessarily mean that Bitcoin is due for a deep correction in the short term. Instead, it simply suggests that a trend may be forming as the market cools off.

Parabolic on the 12-hour Bitcoin price chart. Source: TradingView, Altcoin Psycho

For example, technical analyst John Bollinger said Bitcoin could pull back or consolidate. Considering that Bitcoin is hovering at the top of the Bollinger Bands, Bitcoin is hovering in the overbought area.

However, there is always the possibility that Bitcoin could see a stronger rally in the short term amidst different technical structures.

A breakout of the parabolic uptrend only indicates that a new market structure will emerge. Whether this means a downtrend will occur or a surge will follow remains to be seen.

Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said $15,500 is key for the foreseeable future. He said that if Bitcoin falls below that level, there is a chance of a sharp correction. He wrote:

“The market in general is at a crossroads. If Bitcoin breaks below $15,500, I think we will see a correction across the market, probably to $13,000 or lower.”

Due to market uncertainty, technical analysts are usually cautious in predicting a clear short-term direction. There is a good chance that Bitcoin will either continue to surge higher or see a significant price drop.

However, if Bitcoin falls below $15,500, it would mean that there is a high probability that Bitcoin will test the lower support levels.

On the weekly chart, the two key short-term moving averages are located at $13,967 and $12,390. Although the weekly chart does not have to trace back to the moving averages, there have been several instances in previous bull cycles where the weekly chart retested the lower moving averages.

The variable is whales selling Bitcoin

The Gemini exchange has recorded unusually high deposits since November 10. This is often a sign that “whale” investors are beginning to sell off their holdings for a profit.

Referring to on-chain data from CryptoQuant on Nov. 10, an anonymous analyst going by the handle “Blackbeard” said an unusually large amount of Bitcoin had been transferred to Gemini wallets.

According to media reports, Gemini deposits surged again on November 15, which could lead to higher selling pressure in the short term.

For the foreseeable future, if Bitcoin struggles to recover, selling pressure from whales and miners will remain an important variable. (Cointelegraph)