Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and publishing How Our News is Made Strict editorial policy that focuses on accuracy, relevance, and impartiality Ad discliamer Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio. Bitcoin is now back trading above $115,000, but the recovery comes with a shadow that cannot be ignored. A new gap opened on the CME Bitcoin futures chart, and while the spot market has pushed higher since then, the presence of this gap opens up a bearish scenario. These gaps have a history of pulling Bitcoin back down to fill them, and the most recent one opens up questions about how long the current bullish momentum can last. Bitcoin Opens Up Huge CME Gap
Crypto analyst Daan Crypto noted on thesocial media platform X how Bitcoin opened the week with a huge CME gap that has continued higher since the futures open. This gap is important, as it has been a while since Bitcoin opened with such a huge gap. Related Reading Bitcoin Price Forms Bearish Evening Star Pattern On Weekly Chart, But Can Price Go Below $100,000? 4 days ago
As shown in the chart image below, this CME gap is between $110,000 and $111,300. Gaps on CME futureshave a tendency to close fairly quickly, meaning that Bitcoin often retraces to the level of the gap before resuming its trend. If that happens this time, the short-term structure of Bitcoin’s price action could deteriorate into a bearish momentum. Source: Chart from Daan Crypto Trades on X
However, Daan also noted that this gap should not be considered in play unless Bitcoin drops below $111,000. But if that happens, the futures chart could drag spot prices lower and turn recent strength into weakness. What Does This Mean For Bitcoin?
A CME gap occurs because the Chicago Mercantile Exchange does not trade over the weekend, unlike the spot Bitcoin market, which operates 24/7. When Bitcoin makes a big move on Saturday or Sunday, CME futures reopen on Sunday evening at a different level than they closed on Friday, and this leaves an empty gap on the price chart. Related Reading Bitcoin Bull Run Is Over? These Signals Show Where The Market Is At 5 days ago
It’s common knowledge that Bitcoin tends to fill these gaps by returning to the level of the gap before continuing in its trend. If Bitcoin retraces to close this latest gap between the $110,000 to $111,000 range, it would erase the recovery that pushed it to $115,000and bring the price back into a zone of uncertainty.
According to Daan Crypto, if that were to happen here, then the entire structure would look pretty bad in the short term. However, this might be one of those very few gaps that never closes or not until months later. This would most likely be the case, unless Bitcoin breaks below $111,000. A dip below $111,000 could ultimately see Bitcoin losing the $110,000 price level again.
If Bitcoin can stay above $115,000 and there’s enough buying pressure,then the gap can be ignored in the short term. The next test will be whether buyers can sustain the recently found momentum and push towards $120,000.
At the time of writing, Bitcoin is trading at $116,380, up by 1.4% in the past 24 hours. BTC trading at $116,300 on the 1D chart | Source: BTCUSDT on Tradingview.com Featured image from Pixabay, chart from Tradingview.com