Here's Why Bitcoin Might Not Dip to $9,600 to Fill the CME Gap

  • Bitcoin has held above $10,000 with extreme accuracy over the past few days.
  • The cryptocurrency has bounced from the $9,900 region back to $10,000 on at least seven separate occasions over the past week.
  • Bitcoin’s ability to hold so well has left some wondering if it will ever fill the CME futures gap at $9,600.
  • BTC’s futures market on the CME does not trade on weekends, meaning gaps fill between price action on the weekdays.
  • These gaps are often filled by BTC for some unexplained reason.
  • If Bitcoin doesn’t close the $9,600 gap, this will be one of the first daily CME gaps that haven’t closed.
  • While nearly unprecedented, analysts think this is a possibility for the cryptocurrency.

Bitcoin May Not Drop to Fill the CME Gap

Because the CME’s Bitcoin futures market doesn’t trade on weekends, there is often a gap formed between each week’s price action. For some unexplained reason, BTC has filled a vast majority of these gaps just shortly after they open.

A report from crypto research firm Markets Science indicates that basically all CME gaps fill eventually and at least three-quarters fill within a week of them being opened.

One Bitcoin gap exists at $9,600, when BTC suddenly broke out in late July and early August in a rally that took the coin to $12,000.

Willy Woo, a prominent on-chain analyst, isn’t convinced Bitcoin will fill the existing gap around $9,600. He recently wrote on the matter:

“I’d say there’s a fair chance this CME gap may not get filled, so far it’s been front run for liquidity. Every dip snapped up. If so it’ll be the first CME gap on daily candles that remains unfilled… I also wonder about the gap being front run, to fill longs with solid liquidity. Whales on derivative exchanges have enough dominance to make that so.”

Chart of BTC's price action over the past few weeks with a gap analysis by crypto trader and analyst Willy Woo (@Woonomic on Twitter). Chart from TradingView.com

Reasons Why BTC May Bounce

There are technical and fundamental reasons why Bitcoin may resume its ascent as opposed to trending lower.

Woo, for instance, recently indicated that the on-chain trends of the cryptocurrency are flipping bullish.

“Local on-chain switching bullish (looking at the next few weeks out), not calling this has bottomed, even though it may have. Playing the big swings it’s not a bad time to buy back in.”

Woo predicted the ongoing Bitcoin price correction. He wrote at the end of August that a move to the high-$9,000s was likely due to on-chain trends and technical trends.

Photo by Sunira Moses on Unsplash
Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com 
Here's Why Bitcoin Might Not Dip to $9,600 to Fill] the CME Gap

Source: Read Full Article