Bitcoin’s Key Price Targets as CME Gaps Loom
As Bitcoin inches ever closer to revisiting previous all-time highs, a significant development emerges in the form of unfilled CME futures gaps. These price gaps, historically known to act as magnets for BTC price action, present traders with clear targets in both directions.
A Tale of Two CME Gaps: The Dual Price Targets for Bitcoin
The past few days have been a rollercoaster for Bitcoin, with the cryptocurrency briefly plunging to new multimonth lows of $82,160 before staging a 5% rebound. Market sentiment, however, remains on edge. Liquidity wipeouts have been widespread, and a noticeable lack of strong buyer interest raises questions about where the next significant support level resides. Data from monitoring platform CoinGlass paints a telling picture—while some bid liquidity exists around the $80,000 mark, it pales in comparison to the strong resistance levels building up towards $90,000.
Amid this uncertain landscape, trader and analyst Rekt Capital identifies two distinct price gaps left open by CME Group’s Bitcoin futures market. Drawing from historical tendencies, Bitcoin’s price tends to “fill” these gaps over time, making them key focal points for future movement. One of these gaps, located between $78,000 and $80,700, has been lingering since November 2024. As Bitcoin moves lower, that gap comes closer to being filled.
However, the downward movement has simultaneously created a new CME gap on the upside. This fresh gap, spanning from $92,700 to $94,000, aligns with the former lower bounds of Bitcoin’s three-month-long trading range. According to Rekt Capital’s analysis, this overlapping factor strengthens the case for Bitcoin eventually climbing back up to the $93,500 region in a potential relief rally, even if further downside comes first.
“Bitcoin has filled almost every CME gap that has formed since mid-March 2024 thus far,” he noted, reinforcing the argument that both the downside and upside targets remain in play.
Extreme Fear and Potential Reversal Signals
While the market grapples with concerns over Bitcoin’s next move, technical indicators suggest that a reversal could be on the horizon. Market sentiment, as reflected in the Crypto Fear & Greed Index, recently plunged to just 10/100, marking its lowest point in years. This extreme fear surpasses even the levels seen during the collapse of the crypto exchange FTX, showcasing the extent of current uncertainty.
On-chain data further supports the possibility of a reversal. Analyst Axel Adler Jr., a contributor to CryptoQuant, examined short-term holder (STH) behavior and noted panic selling among these investors. Using the short-term holder market value to realized value (STH MVRV) metric, which compares Bitcoin’s current price to the cost basis of short-term investors, he uncovered a revealing trend.
“The STH MVRV (155-day) metric has periodically dropped below one, indicating periods of short-term undervaluation and potential reversal points,” Adler shared with followers on X. He further noted that the current values have once again approached these historically significant lower levels, hinting that Bitcoin could soon find support and stage a recovery.
What Lies Ahead?
With liquidity conditions remaining in flux and technical patterns showcasing both bearish and bullish signals, Bitcoin finds itself at a crucial juncture. The CME gaps on either side present compelling targets, making a move to either $78,000 or $94,000 increasingly likely in the near term. Meanwhile, sentiment indicators and on-chain data suggest that Bitcoin’s recent downturn may be nearing exhaustion, priming the market for a potential rebound.
As traders navigate this uncertain landscape, all eyes will be on how Bitcoin reacts to these key price zones. Will it first drop to fill the lower CME gap before rebounding, or could an earlier rally push it toward the upper target? One thing remains clear—the battle of the Bitcoin futures gaps has begun.
