Bitcoin May Drop Until It Fills CME BTC Futures Gap at $8,500
Bitcoin and the aggregated crypto markets have been incurring increased volatility over the past several days, which first began when BTC sharply moved towards $11,000 before swiftly being rejected and plummeting lower.
Now, it appears that Bitcoin is likely to drop back towards the $9,000 region, and analysts are noting that the CME Futures gap that exists around $8,500 could be a logical level for the cryptocurrency to drop to before it finds any meaningful support.
Bitcoin Plummets Towards $10,200 as Selling Pressure Ramps Up
At the time of writing, Bitcoin is trading down nearly 2% at its current price of $10,280, which is down significantly from its daily highs of nearly $10,700 that were set yesterday.
Over a one-week period, it becomes abundantly clear as to just how volatile Bitcoin has been as of late, as it dropped to lows of $9,100 last week before surging past $11,000, which was subsequently followed by a sharp selloff that has led the crypto towards its current prices.
Importantly, the parabolic formation that BTC has formed ever since it began climbing from $3,200 appears to have been broken, which likely means that it will either face a bout of consolidation or move lower in the near future.
Jonny Moe, a popular cryptocurrency analyst on Twitter, elucidated that the parabola has been broken in a recent tweet, while referencing the below chart.
— Jonny Moe (@JonnyMoeTrades) July 22, 2019
Will BTC Drop Until it Fills CME Futures Gap?
One important price level that traders and analysts should closely watch is $8,515, as this is the price level at which Bitcoin formed a CME Futures gap, which are typically filled shortly after they are formed.
Chonis Trading, another popular cryptocurrency analyst, spoke about this level in a recent tweet, noting that BTC did not form any futures gaps this week, but still has the one at $8,515 to fill.
“$BTC – (cme futures) new weekly candle opens within the range of the previous weeks candle so NO new gap. Only open gap on the #bitcoin “weekly” chart is at $8500 area,” he explained in a recent tweet.
$BTC – (cme futures) new weekly candle opens within the range of the previous weeks candle so NO new gap. Only open gap on the #bitcoin “weekly” chart is at $8500 area… pic.twitter.com/2kxzT8tFFl
— Chonis Trading- (@BigChonis) July 21, 2019
Although it is unclear whether or not the key psychological price level of $10,000 will hold as a strong support region, any break below this level will likely open the gates for significantly further losses which may extend all the way down to the aforementioned CME Futures gap.
Featured image from Shutterstock.
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