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Some analysts have expressed fears that Bitcoin could experience a possible crash due to a vulnerability on the Chicago Mercantile Exchange (CME), leading to a massive drop in its price.
As Bitcoin needs to fill the gap, cryptocurrency investors predict that it could push the native cryptocurrency near the critical CME gap, suggesting its price could drop as low as $77,000 per coin.
Bitcoin could fall to $77,000
Crypto analyst Egrag Crypto has suggested that the massive corrections that Bitcoin is experiencing could cause the coin to drop to the $77,000 level.
Egrag added that since October 2022, the flagship cryptocurrency has experienced around seven significant declines, adding: “The average decline for these events is approximately 23.53%.
#BTC Decline – Average Discharge and CME (70-74K): How and Why?
1⃣Average decline:
From October 2022 #BTC recorded almost seven significant declines. Here are the percentage declines:1) 22.70%
2) 20.18%
3) 21.70%
4) 21.42%
5) 23.27%
6) 25.82%
7) 29.65%📊 Average decline in… pic.twitter.com/Vz6QiZlnzF
— EGRAG CRYPTO (@egragcrypto) December 27, 2024
“From the current high of around 108,975, we see a potential decline to the lower end of the CME GAP (between 77-80k). This represents a decline of 25%, which aligns well with the average decline seen in this cycle,” Egrag said in the post.
Egrag also noted that the current 21-week EMA is around $80,000, which suggests that “another flash crash could be on the horizon.”
CME gap at $80,000
Fellow cryptocurrency analyst XForceGlobal reminded traders that “there is a 1D CME gap at $80,000.”
XForceGlobal found that historically, 90% of daily CME gaps were larger than those that were ultimately filled since 2018.
Reminder: The 1D CME gap is USD 80,000.
Statistically, as of 2018, with the growing interest in gaps, 90% of 1-day gaps were eventually filled on timeframes greater than $1000 (ignore everything below the 1D timeframe).
The tricky part about CME gaps is… pic.twitter.com/wJC2ih5U8M
— XForceGlobal (@XForceGlobal) December 24, 2024
However, the cryptocurrency analyst noted that it is arduous to predict when and how the CME gaps will be filled.
“The problem with CME gaps is that the timing and method of filling them remains unpredictable,” XForceGlobal said in the post.
The cryptocurrency analyst sees possible scenarios for filling the CME gaps. In one scenario, XForceGlobal suggests that it could be entered via a deep wave or wave 4 correction, bringing Bitcoin to the $77,000-$80,000 level.
In another scenario, XForceGlobal stated that it could be filled “at a later stage through an assumed 1-2 correction after we finally end the bull market impulse,” which could result in BTC falling to $46,000.
Market dump in January?
Egrag believes that market makers may take advantage of President-elect Donald Trump’s upcoming inauguration to create selling pressure on Bitcoin, contributing to its inevitable crash.
“Market makers are known for taking advantage of opportunities during crises. Expect a market drop on Inauguration Day (January 20, 2025). This could be the perfect local top for a sell-off, possibly sending many newbies into panic,” said a cryptocurrency analyst.
Egrag outlined two scenarios that could develop based on the current market situation, suggesting that in one scenario Bitcoin could rise to $120,000 and later experience a drop to CME GAP before “the bull market resumes in 2025.”
In another possible scenario, the cryptocurrency analyst said BTC could fall to the CME gap of $70,000-$75,000 before the bull market resumes.
Featured image from Pexels, chart from TradingView
