Bitcoin price fell to a low of $59,604 today, down 4%. According to several prominent cryptocurrency analysts, the move was largely fueled by a phenomenon known as the CME gap, a concept central to bitcoin futures trading on the Chicago Mercantile Exchange (CME).
Why did bitcoin value drop today?
The “CME Gap” is a term used to describe the price gap that appears on the CME Bitcoin futures chart. Unlike Bitcoin spot markets that operate 24/7, the CME Bitcoin futures market only trades five days a week, closing on weekends and holidays. This difference in trading hours can result in a price discrepancy between the last trading price on Friday and the market opening on Monday.
Today’s Bitcoin price action can likely be directly linked to the closing of such a gap. A noticeable gap formed over the weekend. Daan Crypto Trades (@DaanCrypto), a prominent trader and analyst, confirmed this by X, explaining, “Bitcoin closed most of the gap that formed this weekend. On Monday, it also closed the gap that formed a week ago and peaked at exactly this point. [..] The gap has now been completely closed. There are no major gaps nearby at this time.”
Other market participants it echoed this sentiment. Titan of Crypto (@Washigorira) hinted at bullish potential after the gap closed, stating on X, “Bitcoin CME Futures gap filled! As expected. Nothing holding BTC back now. Time to send.” This view suggests that a gap fill could remove resistance for Bitcoin price, potentially leading to a rally.
Cryptocurrency analyst Ninja (@Ninjascalp) confirmed: “It was just a CME loophole, guys […] It’s a bullish sell. Everything will be fine. Don’t panic.” Another analyst he commented “For anyone wondering who’s running the BTC market in the brief term, it’s the market makers! There was no way they were going to leave the $1650 CME gap after the weekend.”
What to expect now?
Marco Johanning offered a more nuanced approach, emphasizing the uncertain nature of the current price level. His commentary via X highlighted both the potential and the risks.
“Main scenario: Bitcoin has lost its trend line and closed the CME gap. Price is at local support from which it can now pump. This would be a typical mid-week reversal with liquidity behind the equal highs at 63.8k as the primary target. However, the current level is also fragile. If support is lost, we could see another 1k-2k drop. I can’t wait for Bitcoin to finally exit this grueling capitulation range,” Johanning said.
Analysts from Alpha dōjō (@alphadojo_net) only if in-depth analysis, analyzing the day’s price action and potential future trends. Their report highlighted the critical levels that traders are watching: “The analysis is pretty simple: BTC needs to bounce here, or if it loses the $60k level, much lower prices are likely. Until we break below $60k or above $63.5k, it’s best to take it slow and wait for a clearer direction.”
They also noted a significant pool of liquidity near $60,000 that could act as support, while indicating that a mighty selling presence above that $64,000 level could limit any upside moves. “In the order books, the sell side remains very strong, while the buy side shows no sign of growth.”
At the time of going to press, the BTC price was $60,388.
Featured image created with DALL E, chart from TradingView.com
