CME gap might not be the only reason for bitcoin to retest the $3,000 region in the coming weeks, but it has left many traders worried about the crashing price of the cryptocurrency. The CME gap happens when the BTC price moves after the CME Bitcoin futures market is closed during after market hours. For example, if the price of bitcoin was at $6,500 when the futures market closes and it had surged to $7,000 when it opens, there is a $6,500 to $7,000 gap on CME.
A steep decline in the volume of the futures market
In the current scenario, the CME gaps are of less importance, given the noticeable decline in the volume of the futures market since the last month. As the US stock markets crashed, institutional investors showed signs of exiting the cryptocurrency market, at least in the foreseeable future. This led to a drop in the volume in the BTC futures market, which reduced the impact of CME on the short-term price trend of the leading cryptocurrency.
Bitcoin continues to hover around $6,800.
At the time of writing, the price of the leading cryptocurrency, bitcoin is changing hands at just above $6,800 mark, 1.7% up in the last 24-hours. BTC price rejected the $7,100 to $7,500 range many times in the past week. The short term prediction for the leading cryptocurrency is still quite bearish. The technical structure of bitcoin indicates a retest to $5,300 range based on key Fibonacci levels. The technical analysis, combined with the presence of CME gaps in the $3,000 region, leaves the leading cryptocurrency vulnerable to a correction. Bitcoin is still coupled with the traditional financial markets, which is also a bearish signal for cryptocurrency, given the inevitable economic slowdown and crash in the financial markets because of the ongoing global pandemic.
This is the first time that bitcoin is heading into a halvening event with the Relative Strenght Index being at historically low levels.