Bitcoin Forms Major CME Gap Amid Weekend Volatility
Bitcoin’s recent price action indicates a recovery from a drop to $78,258, but the emergence of a new CME gap could signify a pullback toward the low $80,000 levels. Analysts highlight that volatility in the market has resulted in significant liquidations, and caution is advised amid overly optimistic sentiment surrounding Bitcoin’s future performance. The current trading price stands at $90,170, reflecting a slight decline over the past day.
Bitcoin (BTC) has managed to recover most of its losses after a significant drop to $78,258 over the weekend of February 28. However, this volatility has resulted in a significant new CME gap, which may indicate the potential for another price decline toward the low $80,000 range. Analysts express concerns that despite recovery, BTC remains vulnerable to further dips.
According to crypto analyst Rekt Capital, Bitcoin filled two significant CME gaps during the weekend: one between $78,000 and $80,700, and another between $92,800 and $94,000. The notable volatility has led to the formation of a massive new CME gap between $84,650 and $93,300. While the low of $78,258 may be seen as the bottom, it does not preclude a revisit to that level.
For those unfamiliar, a Bitcoin CME gap represents the price difference between Bitcoin’s closing and the next day’s opening price on the CME futures market, which closes over the weekend while spot trading continues. Historical data suggests that such gaps tend to act as magnets for market prices. Even if Bitcoin were to approach the lower end of this new CME gap, it would indicate a higher low compared to the previous low.
Rekt Capital expressed that as BTC holds the key macro support at $93,500, any short-term volatility might only provide opportunities for traders. In contrast, fellow analyst Merlijn The Trader anticipates increased volatility following the recent creation of this sizable CME gap, which has already resulted in over $900 million in liquidations due to the erratic market behavior.
Furthermore, another analyst, known as Will, has indicated that the prevailing sentiment surrounding Bitcoin is overly optimistic for a retest of prior accumulation levels. Will has identified the mid-$70,000 range as a target for accumulating BTC, advocating caution in the current market.
While Bitcoin is trading near the $90,000 level, it is projected that it could decline to about $74,700, as highlighted by crypto analyst Ali Martinez. Martinez noted that historically, Bitcoin experiences rebounds from long-term support levels situated within the mid-$70,000 range.
Coinbase analysts have reported that Bitcoin is currently facing challenges due to a lack of significant near-term positive catalysts, with issues such as the recent Bybit hack and ongoing macroeconomic uncertainties playing a role in its struggles. Fortunately, spot Bitcoin exchange-traded funds (ETFs) are beginning to see net inflows again. As of the latest report, Bitcoin is trading at $90,170, reflecting a decrease of 1.5% over the past 24 hours.
In conclusion, while Bitcoin has demonstrated some recovery following a substantial drop, the creation of a new CME gap raises concerns about potential price declines. Analysts have rightly pointed out the volatility of the current market, the historical significance of CME gaps, and prevailing overly optimistic sentiment among traders. Caution is advised as Bitcoin navigates through a challenging environment influenced by macroeconomic factors and market sentiment.
Original Source: bitcoinist.com
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