Bitcoin’s been a bit wobbly lately. After hitting a new high around $124,457, it’s now hanging around $108,000 – a drop of about 14%. Investors seem pretty chill about it, waiting to see what happens next.
A CME Gap and Potential Recovery
Crypto analyst KillaXBT thinks Bitcoin is about to bounce back. Their reasoning? A CME gap. Here’s the lowdown:
- CME Gaps: The Chicago Mercantile Exchange (CME) stops trading Bitcoin futures on weekends. If Bitcoin’s price moves significantly while the CME is closed, it creates a gap in the chart.
- Last Weekend’s Gap: The CME closed on August 23rd with Bitcoin at $116,939. When it reopened on August 25th, Bitcoin was at $112,600, leaving a gap of about $4,300. Since then, the price has fallen even further.
- Historical Data: KillaXBT points out that historically, Bitcoin has filled 98% of these weekend CME gaps. If that pattern holds, Bitcoin could rise by about 8% to fill this gap, reaching around $116,939.
- Monthly Close: The end of the month is usually a volatile time, with institutional investors making adjustments. A move back towards $116,900 would not only close the gap but also show some serious strength.
The Bigger Picture: Bitcoin’s Long-Term Outlook
KillaXBT isn’t just focused on the short term. They’re bullish on Bitcoin’s long-term prospects, citing:
- Recent Printing: A massive $5 billion was printed in less than a week, which historically has preceded big price increases.
- Leverage Flush: The current price drop is likely a result of investors closing leveraged positions before the monthly close.
- Halving Cycle: Based on past halving cycles, KillaXBT believes there could be another 30-45 days before Bitcoin reaches its peak for this cycle. The current cycle has lasted 490 days.
Key Support and Potential Risks
A key support level sits between $106,000 and $107,000. If Bitcoin falls below $100,000, KillaXBT’s prediction would be invalidated, potentially prompting a change in strategy.
At the time of writing, Bitcoin is trading around $107,954, down about 3.44% in the last day.
