three causes Bitcoin worth rebounded rapidly after falling to $ 15.7,000
Bitcoin (BTC) price fell to $ 15,670 on November 15 at Binance. The highly volatile decline came hours after BTC hit $ 16,355, showing strong momentum.
Three key factors likely caused Bitcoin's price to drop overnight. The three possible factors are a weekend shakeout, the daily moving average (MA) and retesting the parabola.
BTC / USD daily chart. Source: TradingView.com
Weekend shakeouts and lower support retests are healthy
As Cointelegraph reported, algorithmic traders expected the Bitcoin market to decline over the weekend.
There was a batch of sell orders for $ 16,500 that were not drawn when the price neared $ 16,400. This meant that the orders were real sell orders that put selling pressure on the cryptocurrency market.
On the structure of the market, which likely encouraged traders and bots to take short positions, on-chain analyst Willy Woo said weekend volatility was bullish.
He said "bearish specs" are expected to shake off, but the market is still in the "buy the dip" area. He wrote:
“Weekend trading setup: shaking off some bearish technical details (4h RSI div, 8h TD9). On-chain short and medium term fundamentals are bullish, with more coins withdrawn from the exchanges, more users arriving. Buy the dip scenario. "
The dip buy reflects the upward momentum
On the daily chart, the decline to USD 15.6k confirmed a retest of the 10-day moving average. The retest was important as BTC retested the same MA before continuing after a massive price spike last week.
If the price of Bitcoin had continued to fall below the 10-day MA, it would have meant another collapse. However, the immediate rebound from the levels it bounced from on November 7th is relatively positive in the short term.
On November 7, BTC saw a similar decline, albeit in a different price range. The price fell abruptly from $ 15,753 to $ 14,344, down 5%. The dominant cryptocurrency also rallied from the 10-day MA on the daily chart at this point.
In the next few days, BTC hit a two-year high of $ 16,480, confirming a strong breakout.
Parabolic advances require retests
Josh Olszewicz, a chartist and technical analyst on cryptocurrency, shared a chart showing that Bitcoin is in a parabola.
Bitcoin parabola. Source: Josh Olszewicz
During a parabolic uptrend, the momentum of an asset continues to increase as its price increases. However, if the parabolic cycle is interrupted, there is a risk of major retreat for an asset.
In the short term, Bitcoin's parabola will remain intact as long as BTC stays above the $ 15,300-15,500 range.
Traders and technical analysts have found similar numbers over the past 24 hours. Michael van de Poppe, a full-time trader on the Amsterdam Stock Exchange, also said the $ 15,500 support level remains key for BTC in the short term.
In the short term, Bitcoin would need to achieve sustained resilience in excess of $ 15,500, and ideally defend the $ 15,700 support, as it has done for the past 24 hours.