Bitcoin Price Drops Below $60,000: Key Reason Explained
July 03 2024 - 1:00PM
NEWSBTC
The Bitcoin price has fallen to a low of $59,604 today, marking a
4% decrease. According to several renowned crypto analysts, this
movement was largely driven by the phenomenon known as the CME gap,
a concept critical in Bitcoin futures trading at the Chicago
Mercantile Exchange (CME). Why Is Bitcoin Down Today? A “CME gap”
is a term used to describe the price gap that emerges on the
Bitcoin CME futures chart. Unlike Bitcoin’s spot markets that
operate 24/7, the CME Bitcoin futures market only trades five days
a week, closing over the weekend and on holidays. This difference
in trading hours can result in a price discrepancy between the last
traded price on Friday and the market’s opening on Monday. Today’s
Bitcoin price action can probably be directly linked to the closure
of such a gap. Over the weekend, a noticeable gap formed. Daan
Crypto Trades (@DaanCrypto), a prominent trader and analyst,
confirmed this via X, explaining, “Bitcoin closed most of the gap
that was created during this weekend. On Monday it also closed the
gap that was created a week ago and topped out right at that point.
[..] The gap has now been fully closed. No major gaps in nearby
proximity as we speak.” Related Reading: Fundstrat’s Head Of
Research Says Bitcoin Will Reach $150,000, Here’s When Other market
participants echoed this sentiment. Titan of Crypto (@Washigorira)
indicated the bullish potential post-gap closure, stating on X,
“Bitcoin CME Futures GAP got filled! As expected. Nothing holds BTC
back now. Time to send.” This view suggests that filling the gap
could remove resistance for Bitcoin’s price, potentially leading to
an uptick. Crypto analyst Ninja (@Ninjascalp) confirmed, “this
was just a CME gap fill guys […] it’s bullish selling. It’s all
going to be okey. Don’t panic.” Another analyst commented “For
anyone questioning who’s running the BTC market in the short term,
it’s market makers! There was no way they were going to leave a
$1,650 CME gap from the weekend.” What To Expect Now? Marco
Johanning offered a more nuanced take, emphasizing the precarious
nature of the current price level. His commentary via X highlighted
both potential and risk. Related Reading: Bitcoin Bull Run Tied To
Economic Echoes Of The 1930s-1970: Arthur Hayes “Main scenario:
Bitcoin has lost the trendline and closed the CME gap. The price is
sitting on a local support, from which it can now pump. That would
be a typical mid-week reversal with the liquidity behind the equal
highs at 63.8k as the main target. However, the current level is
also fragile. If the support is lost, we could see another 1k-2k
drop. I can hardly wait for Bitcoin to finally leave this
exhausting time capitulation range,” Johanning stated. The analysts
from Alpha dōjō (@alphadojo_net) provided an in-depth analysis,
dissecting the day’s price movement and potential future trends.
Their report highlighted the critical levels that traders are
watching: “The analysis is quite simple: BTC needs to bounce here,
or if it loses the $60k level, much lower prices are likely. As
long as we don’t break below $60k or above $63.5k, it’s best to
take it slow and wait for a clearer direction.” They also noted a
significant liquidity pool around the $60,000 mark which might act
as a support, while pointing out that a strong selling presence
above this level at $64,000 could cap upward movements. “In the
order books, the sell side remains very strong, while the bid side
fails to show any increase.” At press time, BTC traded at $60,388.
Featured image created with DALL·E, chart from TradingView.com
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