Bitcoin, the pioneering cryptocurrency, is once again under the scrutiny of market analysts who express concerns about a possible price crash. This potential downturn is believed to be influenced by the Chicago Mercantile Exchange (CME) gap, which could lead to a significant drop in Bitcoin’s value.
Understanding the CME Gap and Its Potential Impact on Bitcoin
The CME gap often occurs when the trading of Bitcoin futures on the Chicago Mercantile Exchange halts over the weekend, causing a discrepancy between Friday’s closing price and Sunday’s opening price. Traders and analysts are now speculating that Bitcoin may be driven to fill this gap, potentially pushing its value down to a critical level.
Bitcoin Could Slide To $77,000
Renowned crypto analyst Egrag Crypto has highlighted that the ongoing corrections in Bitcoin’s price trajectory might result in a plunge towards the $77,000 mark. Since October 2022, Bitcoin has experienced a series of significant price drops. Egrag Crypto has documented approximately seven such declines, with an average reduction of 23.53%.
The average drop across these events is detailed as follows:
- 22.70%
- 20.18%
- 21.70%
- 21.42%
- 23.27%
- 25.82%
- 29.65%
With the current high hovering around $108,975, Egrag predicts a potential decline to the lower end of the CME gap, estimated to be between $77,000 and $80,000. This aligns closely with the historical average drop observed in previous cycles.
CME Gap at $80,000
Another respected crypto analyst, XForceGlobal, reminds traders of the existence of a 1-Day CME gap at the $80,000 level. Historically, 90% of daily CME gaps larger than $1,000 have been filled since 2018, suggesting a high probability of Bitcoin moving to address this gap.
XForceGlobal acknowledges the unpredictable nature of filling CME gaps, noting, “The timing and method of filling CME gaps remain unpredictable.” However, they propose scenarios for filling these gaps, including a deep wave correction that could see Bitcoin’s value dip to the $77,000 to $80,000 range. Alternatively, the gap could be filled at a later stage, potentially resulting in a drop to $46,000 following the completion of the current bull run’s impulse.
A Market Dump in January?
Egrag Crypto foresees a possible market dump coinciding with the inauguration of President-elect Donald Trump on January 20, 2025. This event could prompt market makers to trigger selling pressure on Bitcoin, contributing to a short-term price crash. Egrag outlines two potential scenarios: Bitcoin could initially pump to $120,000 before dipping to the CME gap and then resuming its upward trend in 2025. Alternatively, Bitcoin might fall to the $70,000 to $75,000 range before continuing the bull run.
Conclusion: Navigating Uncertain Waters
The cryptocurrency market is inherently volatile, and the current speculation surrounding Bitcoin’s potential price crash due to the CME gap underscores this uncertainty. Investors are advised to stay informed and exercise caution as they navigate these turbulent waters.
