Bitcoin CME gap to $28,000 filled, but correction risk looms
Bitcoin’s (BTC) uptrend has persisted, reaching its highest level since June 2022 before the FTX collapse. BTC has breached the nearest resistances, filling the Chicago Mercantile Exchange (CME) gap and breaking above $28,400.
However, the possibility of a short-term correction remains a concern, with bears trying to delay confirmation of a sustained bull market.
CME gaps are commonly known in the market as deviations that occur when the price of Bitcoin moves sharply outside of regular trading hours on the Chicago Mercantile Exchange. Since the CME is closed on weekends, the price of BTC during these periods may deviate from the closing price of the previous trading days.
All this leads to a gap between the closing and opening price when trading resumes. Despite Bitcoin’s recent gains, it’s worth noting that its price remains highly volatile and subject to significant swings. So, what are the remaining gaps for the flag cryptocurrency in the market that are yet to be filled?
One CME GAP filled, two left to go for Bitcoin
According to the cryptoanalyst who goes by the pseudonym MikyBull, “Although Bitcoin has managed to fill the $28,000 gap, after a weekly close above $27,500, another huge gap is created at $27,000, which could delay the continuation of the uptrend if confirmation of a move to the downside for filling the gap is in order.”
Looking at the chart, a significant gap of $20,300 remains to be filled for Bitcoin. While there is no guarantee that this gap will be filled, it is possible that price action could move back towards the opening price and jeopardize the current uptrend of the market’s largest cryptocurrency.
Key Support and Resistance for BTC
Bitcoin is nearing the end of its bear market and setting its sights on the $30,000 zone. However, with a current trading price of $27,500, BTC is approaching a strong resistance zone at $28,600 as it enters a new, fully formed bull trend.
If Bitcoin cannot surpass the next resistance, the previous hurdle of $25,200 could be a crucial support level to prevent the cryptocurrency from falling below this mark. This is in line with the 200-day moving average (MA), a key floor for Bitcoin to maintain its current uptrend.
Bank instability has made Bitcoin an attractive safe haven for investors, but due to its inherent volatility, sharp swings in either direction are likely to be a common occurrence. As a result, corrections and retests of new resistance levels are likely to emerge as Bitcoin continues to experience ups and downs in the market.
BTC has reported significant gains in broader timeframes, with a 26% increase over the past seven days and a 24% increase over the past fortnight. However, over the past 24 hours, the market’s largest cryptocurrency has seen a 1% decline after a failed attempt to break through the $28,600 resistance level.
Featured image from Unsplash, chart from TradingView.com.
