“Huge gap” in CME could force Bitcoin to back down
Bitcoin hit an annual high of $ 19,400 before registering a 14% price correction last week. The price correction after three weeks brought Bitcoin prices close to the $ 16,400 mark on Friday. Bitcoin has managed to rebound by more than $ 2,000 since then, as its price has reached a daily high of $ 18,669 and looks ready for another price hike action.
The price correction last week was not a surprise. In fact, veterans of the trade said the market retraction during the bullish run is no big deal and Bitcoin has seen price corrections of 30%. The current bull rally brought the same fanfare around cryptocurrency as it did in 2017, the only difference being that institutional investors are betting on the king currency to further boost their money, rather than minimizing it like a currency bubble. Internet.
JP Morgan believes Bitcoin could fall further
JP Morgan Chase previously predicted that the price of bitcoin could fall further, as the initial “foam” that carried the BTC price for so long has dissipated. JP Morgan strategist Nikolaos Panigirtzoglou wrote in his analysis:
“Previous foam in the positioning of momentum traders has been largely eliminated”
The continued rise in Bitcoin’s price is largely attributed to the institutional FOMO, where large hedge funds and traditional asset management companies have revealed that their institutional clients are actively adding Bitcoin to their portfolio as they see it as an inflation hedge . The JP Morgan strategist believes that the flow of trade in Grayscale’s Bitcoin will be a key factor in determining the price of BTC. He explained:
“A failure by the Grayscale Bitcoin Trust to receive additional flows in the coming weeks would also cast doubt on the idea that institutional investors, such as family offices, have embarked on a trend to embrace Bitcoin as digital gold, replacing traditional gold as a long-term investment. deadline.”
What’s next for the BTC price
Bitcoin started its price hike almost a month ago, when it surpassed the $ 13,000 key resistance, and since then, the cryptocurrency has managed to overcome any small resistance on its way to $ 19,000. The price correction was agreed, as Bitcoin has already stalled twice when consolidating around $ 18,500.
At the moment, many are pointing to the huge ‘gap’ in the CME that formed over the weekend, which would prove to be a short-term obstacle to the price of Bitcoin. The gap widened to almost $ 2,000 and the BTC price is expected to correct up to $ 17,000 to fill the current gap.
It is believed that Bitcoin often tends to fill the gap in the CME before going up or down, but not always, as there are several unfilled gaps in $ 9k and $ 11k that have not yet been filled.
– Zack Voell (@zackvoell) November 29, 2020
“Bitcoin futures open the week with a monstrous $ 1,300 gap in CME, one of the biggest gaps of all time” – pointed out analyst Zack Voell.