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Over the weekend, many traders pointed out that the price of Bitcoin (BTC) had broken its parabolic uptrend that dated back to September. Technical analysts brace for pullback as the dominant cryptocurrency considers consolidation.
Bitcoin could still experience a strong rally after the weekly close if there is a continuation of the rally. But it would be necessary to quickly reintegrate the dish or risk a possible downward correction.
Traders identify $ 15,500 as key level to maintain uptrend
Since early September, Bitcoin has continuously rallied without major fixes. Typically, during uptrends, BTC has historically seen declines of 20% to 30%. It is possible that a large pullback could ensue if BTC fails to fit into the dish.
According to the 12-hour Bitcoin price chart shared by pseudonymous trader “Altcoin Psycho”, BTC is now out of 2 months of parabolic lead.
The trend does not necessarily indicate that BTC would see a deep correction in the near term. Rather, it just means that a trend could form as the markets cooler.
For example, longtime technical analyst John Bollinger said that BTC is likely to pull out or consolidate. Whereas BTC is hovering at the top of the Bollinger Bands, BTC is hovering in overbought territory.
But, there is still a possibility that BTC could see a stronger rally in the short term in a different technical structure.
Breaking the parabolic uptrend simply means that a new market structure would emerge. It remains to be seen whether this means that a downtrend will emerge or that a wider rally will occur.
For the foreseeable future, Michael van de Poppe, a full-time Amsterdam Stock Exchange trader, said $ 15,500 holds the key. He said if BTC goes below that a big correction is possible. he wrote:
“The market in general is at a crossroads. Going below $ 15,500 and guess we’ll see a correction in the markets with $ BTC down to $ 13,000 or less. “
Technical analysts are generally cautious when predicting a clear short-term direction due to market uncertainty. There is a good chance that BTC could continuously rise or see a significant price drop.
If Bitcoin falls below $ 15,500, that would mean that the likelihood of BTC testing low levels of support is high.
On the weekly chart, the two major short-term moving averages (MA) stand at $ 13,967 and $ 12,390. While the weekly chart did not need to move up to MAs, in previous bullish cycles there were instances where the weekly chart retested lower MAs.
The variable is that whales sell BTC
Since November 10, the Gemini exchange has registered unusually high deposits. This usually indicates that the whales are selling their holdings for profit.
A pseudonymous analyst known as “Blackbeard” said An unusually large amount of $ BTC was transferred to Gemini wallets on November 10, referring to CryptoQuant’s on-chain data.
On November 15, as Cointelegraph reported, Gemini deposits rose again, which could lead to higher selling pressure in the near term.
For the foreseeable future, if BTC struggles to recover, selling pressure from whales and miners would remain important variables.
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