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Home Latest News Market Three reasons why Bitcoin price quickly recovered after dropping to $15.7K

Three reasons why Bitcoin price quickly recovered after dropping to $15.7K

The price of Bitcoin suddenly dropped to $15,670 before traders moved in to defend the level of $16,000.

On November 15, the Bitcoin (BTC) price fell to as low as $15,670 on Binance. The incredibly unpredictable decline came hours after BTC reached $16,355, showing good traction.
The overnight decline in the price of Bitcoin was possibly triggered by three main factors. A weekend shakeout, the daily moving average (MA) retest, and a retest of the parabola.

Weekend Shakeout

As Cointelegraph reported, algorithmic traders expected a weekend drop in the Bitcoin market to materialize. This meant the orders were legitimate sales orders, applying pressure on the cryptocurrency market to sell. Atop the market structure that likely encouraged traders and bots to short, on-chain analyst Willy Woo said the weekend volatility is bullish.
He said that shaking off “bearish technicals” is expected, but the market still remains in the “buy the dip” territory. He wrote: “Weekend trading setup: Shaking off some bearishness technicals (4h RSI div, 8h TD9). Short and mid term on-chain fundamentals bullish, more coins scooped off exchanges, more users arriving. Buy the dip scenario.”

Daily Moving Average (MA) Retest

The decline to $15.6k on the daily chart confirmed a retest of the 10-day moving average. The retest was significant because in the last week after a huge price increase, BTC retested the same MA before proceeding. If the price of Bitcoin continued to slip below the 10-day MA, this would have meant a further breakdown. However the immediate rebound from the same level that it returned from the dip of Nov. 7 is reasonably optimistic in the short term.

Retest Of The Parabola

Josh Olszewicz, a chartist and a cryptocurrency technical analyst, shared a chart that shows Bitcoin is in a parabola. During the parabolic uptrend, the momentum of the asset begins to expand as prices rise. But once the parabolic cycle breaks, the asset may be at risk of a significant pullback. In the short term, the Bitcoin parable remains alive as long as the BTC remains above the $15,300 to $15,500 mark.
According to cointelegraph.com, traders and technical analysts have pinpointed similar levels in the last 24 hours. Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, similarly said that the $15,500 support level remains key for BTC in the near term. In the short term, Bitcoin would need to see continuous resilience above $15,500 and ideally defend the $15,700 support as it did throughout the last 24 hours.

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