Why the Drop?
The recent Bitcoin price drop is largely attributed to the “CME gap,” a price discrepancy that occurs between the Bitcoin spot market and the CME Bitcoin futures market.
The CME futures market is closed on weekends and holidays, while the spot market operates 24/7. This difference can lead to a gap in the price when the futures market reopens.
CME Gap Closure
Over the weekend, a significant CME gap formed. On Monday, Bitcoin’s price action filled this gap, leading to a 4% decrease.
Market Outlook
Analysts believe that the CME gap closure could remove resistance for Bitcoin’s price, potentially leading to an uptick. However, they also caution that the current price level is fragile and could see further declines if support is lost.
Key Levels to Watch
Traders are closely monitoring the following levels:
- Support: $60,000
- Resistance: $64,000
Conclusion
The Bitcoin price drop is likely temporary and related to the CME gap closure. Analysts are cautiously optimistic about the future price action, but they advise waiting for a clearer direction before making any major trades.
