Bitcoin's price fell sharply to $ 15,670 before traders jumped into action to defend the $ 16,000 level.

The price of Bitcoin ( BTC ) fell to $ 15,670 on Binance on November 15. The highly volatile drop came hours after BTC hit $ 16,355, demonstrating solid momentum.

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Three key factors are likely to have caused this overnight Bitcoin price drop. The three potential factors are a weekend shake-up, a retest of the daily moving average (MA), and a retest of the parabola.

Daily chart of the BTC / USD pair. Source: Tradingview

Weekend shakes and retesting a bottom support are healthy things

As Cointelegraph reported , algorithmic traders expected to see a weekend drop in the Bitcoin market.

There were a bunch of sell orders above $ 16,500 that didn't go away when the price approached $ 16,400. This meant that these orders were true sell orders, applying selling pressure in the cryptocurrency market.

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In addition to the market structure that likely encouraged traders and bots to sell short, on-chain analyst Willy Woo said that weekend volatility is somewhat bullish.

He said he expected a "technical bearish" shake, but the market is still in "buy the dip" territory. He wrote :

“Weekend trade setup: get rid of some bearish technicals (4hr RSI, 8hr TD9). The fundamentals of the chain in the short and medium term are bullish, more coins leave the exchanges, more users arrive. Buy the scene of the fall.

Buys during a dip reflect bullish momentum

On the daily chart, the drop to $ 15,600 confirmed a retest of the 10-day moving average. The retest was important because last week, after a big price spike , BTC retested the same moving average before moving up further.

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If the price of Bitcoin continued to fall below the 10-day moving average, it would have meant a deeper drop. But, the immediate recovery from the same level it recovered from in the November 7 crash is a relatively positive short-term thing.

On November 7, BTC experienced a similar drop, albeit in a different price range . The price plummeted abruptly from $ 15,753 to $ 14,344 to record a 5% drop. The market leading cryptocurrency also bounced off the 10-day moving average on the daily chart on that occasion.

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In the next few days after, BTC hit a two-year high of $ 16,480, confirming a strong breakout.

Parabolic rises need new evidence

Josh Olszewicz, Chartist and Cryptocurrency Technical Analyst, shared a chart where you can see that Bitcoin is in a parable.