The Bitcoin price fell below the parabola in the 12-hour mark, but traders don’t expect a big correction yet.
Over the weekend many traders reported that the price of Bitcoin (BTC) broke its parabolic upward trend that had been going on since September. Technical analysts are preparing for a reversal as the dominant cryptomone seeks to consolidate.
Bitcoin could still record a strong recovery after the weekly close if there’s a continuation of the rally. But it would have to quickly re-enter the parabola or risk a potential downward correction.
Traders point to the $15,500 as the key level to maintain the uptrend
Since early September, Bitcoin News Trader has been uploading continuously without major corrections. Typically, during the upward trends, BTC historically recorded declines of 20% to 30%. There’s a possibility of a major setback if the BTC doesn’t make it back into the parabola.
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According to the 12-hour Bitcoin price chart shared by the trader under the pseudonym „Altcoin Psycho“, BTC has already exceeded 2 months of parabolic advance.
The trend doesn’t necessarily indicate that BTC will see a deep correction in the short term. Rather, it simply means that a trend could form as the markets cool.
Bullish parabola on the 12-hour Bitcoin price chart.
For example, long-time technical analyst John Bollinger said that BTC’s price is likely to fall or consolidate. Considering that BTC is at the top of the Bollinger bands, BTC is currently in overbought territory.
However, there is always a possibility that BTC may record a stronger rise in the short term in a different technical structure.
A break in the parabolic uptrend simply means that a new market structure will emerge. It remains to be seen whether this means that a downward trend will emerge or that a broader rally will occur.
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For the immediate future, Michael van de Poppe, a full-time trader at the Amsterdam Exchange, said the $15,500 level is key. He said that if BTC falls below that level, a major correction is possible. He wrote:
„The market in general is at a crossroads. If we go below $15,500, I guess we’ll see a correction in all the BTC markets with a possible price of $13,000 or less.
Technical analysts are generally cautious about predicting a clear short-term direction because of market uncertainty. There is a strong possibility that BTC could rise continuously or register a significant drop in prices.
However, if Bitcoin falls below $15,500, it would mean that the likelihood of BTC testing lower support levels is high.
On the weekly chart, the two key short-term moving averages (SMAs) are at $13,967 and $12,390. Although the weekly chart doesn’t have to go back to the SMAs, in previous bullish cycles, there were cases where the weekly chart tested lower SMAs again.
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The variable is the BTC sale of the whales
Since November 10, the Gemini Exchange recorded unusually high deposits. This typically indicates that the whales are moving to sell their holdings for profit.
A pseudonymous analyst known as „Blackbeard“ said that an unusually high amount of BTC has been transferred to Gemini’s purses“ on November 10, referring to CryptoQuant’s chain data.
On November 15, as reported by Cointelegraph, Gemini’s deposits increased again, which could lead to increased sales pressure in the short term.
For the foreseeable future, if BTC struggles to recover, sales pressure from whales and miners will remain a major variable.