Bitcoin Price Drops Below $80,000, Filling CME Gap
Bitcoin (BTC) experienced a significant drop today, falling below $80,000 for the first time in over three months. Data from Binance shows that BTC reached a low of $78,258, filling the Chicago Mercantile Exchange (CME) gap between $78,000 and $80,000.
With this recent dip, BTC has now filled every CME gap since March 2024. Currently, the leading cryptocurrency is trading in the low $80,000 range.
CME Gap and Potential Rebound for Bitcoin
For those unfamiliar, the CME gap refers to the price difference on the CME Bitcoin futures chart between Friday’s closing price and Monday’s opening price, as CME does not operate on weekends. These gaps are often filled later as Bitcoin’s price naturally retraces to these levels, serving as crucial support or resistance zones.
A new CME gap has emerged due to the current market sell-off triggered by the confirmation of trade tariffs on Canada, China, and Mexico by US President Donald Trump. According to crypto analyst Rekt Capital, this new CME gap is between $92,800 and $94,000. Historical data suggests that such gaps can act as price magnets, potentially driving BTC upwards and initiating a bullish trend reversal.
In the past, BTC has filled CME gaps and then continued to experience price fluctuations before ultimately surging to new highs. However, external factors such as economic policies and geopolitical tensions can also impact Bitcoin’s price trajectory.
Recent inflation data and conflicting views between the US Federal Reserve (Fed) and President Trump regarding interest rates add further uncertainty to the market. While the Fed is hesitant to cut rates, positive inflation figures could prompt them to reconsider. Current projections indicate that the Fed may keep interest rates unchanged at the upcoming FOMC meeting on March 19.
Assessing Bitcoin’s Price Bottom
Despite BTC’s recent decline of nearly 20% in the past month, some analysts believe that further downside is possible. Standard Chartered has forecasted a potential 10% drop in BTC before finding support.
On the other hand, indicators suggest that BTC may be nearing a local bottom. Analysts point to easing sell-side pressure and a contrarian buy signal from the Cryptoasset Sentiment Index as positive signs for Bitcoin’s price stability. At the time of writing, BTC is trading at $83,508, reflecting a 2.5% decrease in the past 24 hours.
Featured image from Unsplash, Charts from X and TradingView.com