Last weekend saw several traders pointing out that the price of Bitcoin had broken its parabolic uptrend which went all the way back in September. With the eye of the dominant cryptocurrency looking towards consolidation, most of the technical analysts are actually bracing for a massive pullback. Incidentally, Bitcoin might just see its week close through a strong recovery if the rally continues. But for that to happen, it would have to enter the parabola pretty quickly or face downward correction.
Traders pinpoint $15,500 as the key level to maintain the Bitcoin run
Since last September, Bitcoin has been constantly rallying its stocks without major corrections. As it goes, when such a trend takes place Bitcoin historically sees drops of around 20% to 30%. There is a major possibility that Bitcoin might see a massive pullback if they don’t get back into the parabola. Altcoin Psycho, a Bitcoin trader recently shared information that the cryptocurrency was almost 2-months out of date with the parabolic advance.
It must be noted down that such a trend doesn’t necessarily mean that Bitcoin is going to see quite a deep correction in the coming term. But, it does signify that this might be the trend when more and more markets start cooling down. John Bollinger, a long-time technical analyst has already spoken about how Bitcoin is most probably going to pull back or attempt for consolidation. Now, with Bitcoin hovering on top of Bollinger Bands, it does look like Bitcoin is trudging above overbought territory.
Any break in a parabolic uptrend is simply symbolic of the emergence of a new market structure. But, whether this implies a downtrend or a broader rally- that remains to be seen. Michael van de Poppe, one of the full time traders at the Amsterdam Stock Exchange has mentioned that $15,500 seems to be the key. If the price of Bitcoin drops more than that, they might be looking at a major correction.
Historically, technical analysts usually refrain from predicting a clear short-term direction as a result of market uncertainty. This means that there are extremely plausible chances that Bitcoin could swing any which way- see a price drop, or keep surging onwards.
The variable is whales selling Bitcoin
Since the 10th of November, Gemini exchange has always recorded high deposits. And this is generally indicative of whales looking forward to selling their holdings in order to garner profits. Blackbeard, another analyst has mentioned that quite a large amount of Bitcoins have been transferred to Gemini wallets as far as reports from CryptoQuant’s on-chain data go.
It has been highlighted that if Bitcoin fails to recover in the upcoming months, the pressure of selling exerted by both miners and whales might be extremely important variables.