Bitcoin price fell to a low of $59,604 today, marking a decline of 4%. According to several renowned crypto analysts, this move was largely driven by the phenomenon known as the CME gap, a concept that is critical to Bitcoin futures trading on the Chicago Mercantile Exchange (CME).
Why Did Bitcoin Fall Today?
A “CME gap” is a term used to describe the price gap that emerges on the Bitcoin CME futures chart. Unlike Bitcoin spot markets that operate 24/7, the CME Bitcoin futures market only trades five days a week and is closed on weekends and holidays. This difference in trading hours can result in a price difference between the last traded price on Friday and the market opening on Monday.
The current Bitcoin price action can likely be directly correlated with closing such a gap. A noticeable gap formed over the weekend. Daan Crypto Trades (@DaanCrypto), a prominent trader and analyst, confirmed this via X, explaining: “Bitcoin closed most of the gap that opened this weekend. Monday also closed the gap that had opened a week ago and at that time the peak was reached. [..] The hole has now been completely closed. At the moment there are no major holes in the nearby area.”
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Other market participants echoed this sentiment. Titan of Crypto (@Washigorira) indicated the bullish potential post-gap close, saying on X: “Bitcoin CME Futures GAP has been filled! As expected. Nothing is holding BTC back now. Time to send.” This view suggests that filling the gap could remove resistance to Bitcoin’s price, potentially leading to a rise.
Crypto analyst Ninja (@Ninjascalp) confirmed: “This was just a CME gap, guys […] it is bullish selling. It will be all right. Don’t panic.” Another analyst commented “For anyone wondering who controls the BTC market in the short term: it’s the market makers! There was no way they were going to leave a $1,650 CME gap going into the weekend.”
What can you expect now?
Marco Johanning offered a more nuanced position, highlighting the precarious nature of the current price level. His comments via X highlighted both the potential and the risk.
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“Main scenario: Bitcoin has lost the trendline and closed the CME gap. The price rests on a local support, from which it can now be pumped. That would be a typical mid-week reversal, with liquidity behind the flat highs at 63.8k being the main target. However, the current level is also vulnerable. If support disappears, we could still see a drop of 1,000 to 2,000 euros. I can hardly wait for Bitcoin to finally leave this tiring time capitulation range,” said Johanning.
The analysts of Alpha dōjō (@alphadojo_net) as long as an in-depth analysis, dissecting the day’s price movement and potential future trends. Their report highlighted the critical levels traders are looking at: “The analysis is quite simple: BTC needs to rebound here, or if it loses the $60,000 level, much lower prices are likely. Until we get below $60,000 or above $63,500, it is best to take it easy and wait for clearer direction.”
They also pointed to a significant liquidity pool around $60,000, which could act as support, while pointing out that a strong selling presence above this $64,000 level could stop upside moves. “In the order books, the sell side remains very strong, while the bid side shows no increase whatsoever.”
At the time of writing, BTC was trading at $60,388.
Featured image created with DALL·E, chart from TradingView.com