3 reasons why Bitcoin price abruptly dropped 6% after reaching $15,800

The price of Bitcoin rose to as high as $15,840 before crashing to $14,800.

The three catalysts for the abrupt downtrend were the recovery of the dollar, the decline in gold price as Pfizer announced that its COVID-19 vaccine trials are producing positive results, and whales dumping BTC.Precious metals and Bitcoin fell in tandem.

As the U.S. dollar and stocks triumphed, Bitcoin and gold dwindled simultaneously.

Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, pinpointed the recovery of the U.S. dollar index and suggested that alternative stores of value, like gold and Bitcoin are priced against the dollar.

When the dollar recovers, the price of BTC could fall steeply alongside precious metals.

"There we seem to go. DXY bouncing up as there's more certainties at this point, through which assets like bitcoin, gold and silver drop down substantially. A correction on BTC would be tremendous and a great opportunity in general."Whales began to aggressively sell BTC. When the drop occurred, CryptoQuant, an on-chain market analysis firm, found that whales were selling Bitcoin.

As Bitcoin dropped in a whale-induced pullback, retail investors were continuously longing BTC. Whales had several attractive reasons to sell BTC at $15,800.

"This volatility is just fast money funds that play $BTC as a higher beta $GOLD dumping on vaccine news. The players that enter on behalf of the longer-term thesis for Bitcoin are not changing their positioning."

If BTC recovers strongly from the recent drop, the chances of a rally continuation could increase.

"Bitcoin Short-Term Holder MVRV has been holding its positive ratio for the past six months - and bounced off the neutral line yet another time. Historically, holding this support level is indicative for an ongoing BTC bull market."