In the midst of ongoing turbulence in the cryptocurrency market, Bitcoin has filled a significant CME Gap.
Rekt Capital, a trader and analyst on X, confirmed the development, noting the severity of the current correction. A new CME Gap has now developed, located between $59,400 and $62,550, which Bitcoin would need to reverse to the upside to fill.
The chart provided by Rekt Capital reveals several key levels and patterns. Firstly, Bitcoin recently filled a previous CME Gap, typically indicated by price movement back to a level where there was no trading activity.
A new CME Gap has now formed between $59,415 and $62,550, highlighted by two blue circles on the chart. This gap occurred during periods when the CME futures market was closed, such as weekends or holidays.
Several important support and resistance levels are evident. For instance, the $71,535 mark is a strong resistance level where Bitcoin has previously faced selling pressure.
CME Gaps and Their Implications
CME gaps often act as magnets for price action, with traders expecting these gaps to be filled. Therefore, Bitcoin might move back up to the $59,415-$62,550 range to close the gap.
The formation of this new gap suggests potential short-term upward movement to fill it, though the overall bearish trend could persist if market sentiment does not improve.
Another analyst, pseudonymously known as Stockmoney Lizards, corroborates this view, highlighting the ‘gap up’ that occurred between $58,700 and $60,000, which has been surpassed as the price moved through this range.
According to this analyst, a high liquidity zone between $50,000 and $52,000 has been identified, where significant market activity could provide support.
He also noted that with many leveraged long positions potentially set up around the $50,000 mark, a break below this could trigger a cascade of liquidations. This further action could push the price down. Conversely, holding above this level could reduce the likelihood of these liquidations, providing some bullish momentum.
Mixed Reactions to Bitcoin’s Volatility
Presently, Bitcoin’s price stands at $53,510.95, reflecting an 11.67% decline in the past 24 hours and a 23.11% decline over the past week.
Market reactions to this decline have been mixed. Michael Saylor, chairman and co-founder of MicroStrategy, maintains an optimistic view, encouraging investors to maintain confidence despite short-term fluctuations.
On the flip side, Peter Schiff, a long-term Bitcoin critic, highlights the volatility as a major issue, arguing that Bitcoin’s high volatility disqualifies it as a reserve asset for any major government or central bank.
Schiff contrasts Bitcoin’s performance with other reserve assets like gold, the Swiss franc, the Japanese yen, and Treasuries, which showed more stability during the same period.
Finally, it is worth noting that the last instance of Bitcoin filling a CME gap was in early July. At that time, analysts projected a potential surge, with some predicting Bitcoin could exceed the $72,000 mark following the closure of the CME gap.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
