The humongous Chicago Mercantile Exchange (CME) gap of last weekend has been filled at $9,825 after the BTC price temporarily surged towards the $10,000.
Notably, the $1,265 gap was filled in a record three days hinting of high market volatility and a possibility of even higher highs in days ahead. The BTC price is at the time of press hovering at around $9,550 mark.
#Bitcoin is pushing higher right now! 👀
Will $BTC close the CME gap at approximately $10,000 today?
— The Moon (@TheMoonCarl) May 14, 2020
Technical analysts and market chartists often watch out for these gaps. Given the fluid, back-and-forth movement of BTC prices, these gaps are usually filled in a pullback.
Of note, last weekend, a day before the Bitcoin network halved, Bitcoin prices slid to lows of $8,100 before recovering spectacularly in subsequent sessions.
Even though gains are capped below $10,000, odds are market participants are likely to drive prices above multi-month resistance trend line and this key psychological resistance level.
What is the CME Bitcoin Gap?
The CME Gap is formed because of the nature of Bitcoin. The network operates 24/7 without maintenance days or holidays and it has been like this since the genesis block was mined in 2009.
Since CME is a regulated entity that offers Bitcoin Futures trading and closes shop after hours, price gaps form to reflect changes of price over the weekend or US holidays.
Depending on the size of the gap and the direction, history reveals that there is a tendency of price action to first fill the gap before resuming in the original trend or completely changing price trajectory.
Bitcoin’s V-Shaped Recovery, Will Bulls Hold?
Over the weekend, BTC prices slumped and what is currently printing seem to be a classic V-shape reversal, two days after halving.
— Daniel📈 (@ChartChampions) May 10, 2020
While bulls appear to have a chance, there are doubts from some quarters. A section of traders argue that today’s Asian session short bust of price above the $10,000 was a short squeeze as big players are unloading their holdings.
“Everyone was shorting Bitcoin around 9.5-9.6k. Big players just pushed price above, a short squeeze sent price into 10k gap and into liquidity. CME gap was closed, squeeze filled shorts of the bigger players and price dumped as long as Bitcoin stays above 9.4k, and it’s not over yet.”
Everyone was shorting $BTC around 9.5-9.6k.
Big players just pushed price above, short squeeze sent price into 10k gap and into liquidity.
CME gap was closed, squeeze filled shorts of the bigger players and price dumped
As long as #Bitcoin stays above 9.4k, it’s not over yet
— Crypto Jeremiah (@Crypto_Jeremiah) May 14, 2020