Bitcoin’s price dropped to a low of $59,604 today, marking a 4% drop. According to several renowned crypto analysts, this move was largely driven by the phenomenon known as the CME gap, a critical concept in Bitcoin futures trading on the Chicago Mercantile Exchange (CME).
Why is Bitcoin down today?
A “CME gap” is a term used to describe the price gap that arises in Bitcoin. CME Futures chart. Unlike Bitcoin spot markets that operate 24/7, the CME Bitcoin futures market only trades five days a week, closed on weekends and holidays. This difference in trading hours can result in a price discrepancy between the last traded price on Friday and the market open on Monday.
Bitcoin’s current price action can likely be directly linked to the closing of this gap. Over the weekend, a notable gap formed. Daan Crypto Trades (@DaanCrypto), a prominent trader and analyst, confirmed This via X, explaining: “Bitcoin has closed most of the gap that was created over the weekend. On Monday, it also filled the gap created a week ago and peaked at that time. (..) The gap has now been fully closed. There are no major gaps nearby at this time.”
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Other market participants echoed This sentiment. Titan of Crypto (@Washigorira) indicated the potential for upside on the post-gap close, stating in X: “Bitcoin CME Futures GAP has been filled! As expected. Nothing stopping BTC now. Time to send.” This view suggests that filling the gap could remove resistance to Bitcoin’s price, potentially leading to a rally.
Crypto analyst Ninja (@Ninjascalp) confirmed: “This was just a CME gap, folks (…) it’s a bullish sell-off. Everything is going to be fine. Don’t panic.” Another analyst commented “For those questioning who is driving the BTC market in the short term, it’s the market makers! There was no way they were going to leave a $1,650 gap on the CME over the weekend.”
What to expect now?
Marco Johanning offered a more nuanced approach, emphasizing the precarious nature of the current price level. Your comment via X highlighted both the potential and the risk.
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“Main scenario: Bitcoin has broken the trendline and closed the CME gap. Price is resting on 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 main target. However, the current level is also fragile. If support is lost, we could see another 1k-2k drop. Can’t wait for Bitcoin to finally break out of this exhausting period.” capitulation strip”, said Johanning.
The analysts of Alpha dōjō (@alphadojo_net) offered an in-depth analysis, dissecting the day’s price action and possible future trends. Their report highlighted the critical levels that traders are watching: “The analysis is quite simple: BTC needs to bounce back here, or if it loses the $60K level, much lower prices are likely. As long as we don’t break above $60K or above $63.5K, it’s best to take it slow and wait for clearer direction.”
They also noted a significant liquidity pool around the $60,000 mark, which could act as support, while also pointing out that a strong sales presence Above this level, at $64,000, could limit upward movements. “On the order books, the sell side remains very strong, while the supply side does not show any increase.”
At the time of writing, BTC was trading at $60,388.
![Bitcoin Price Drops Below $60,000: Main Reason Explained 1 Bitcoin price](https://thegurumedia.com/wp-content/uploads/2024/07/BTCUSD_2024-07-03_13-25-00.png)
Featured image created with DALL·E, chart from TradingView.com