Bitcoin’s Price Sell-Off Puts Focus on November’s ‘Runaway Gap’ Below $80K in CME Futures

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Bitcoin‘s Oops Moment: Is the ‘Runaway Gap’ Going to Be a One-Hit Wonder?

What to Know:

  • The infamous runaway gap between $77,000 and $81,000 in CME futures prices is like a star feature in a soap opera, drawing attention as Bitcoin haphazardly tumbled this week. 🎢
  • Ever heard that CME gaps are destined to be filled? Well, one analyst thinks so. Hope springs eternal, right? 🌱

Bitcoin (BTC) has plummeted by a delightful 10% this week, capering down to $86,300, as if trading between $90,000 and $110,000 was just too mainstream. 📉

Now, we have a bearish breakdown that has traders glued to their charts like a kid to a candy shop, scouring for signs of where this sell-off might lead us next. One particularly interesting stop along this bumpy ride is the so-called “runaway gap” in CME bitcoin futures nestled snugly just below $80,000.

But what is a gap, you may ask? Imagine a blank canvas on a price chart between the closing price one day and the opening price the next – that’s a gap, my friend! It emerges when no one bothered to trade in between. When it shows up amidst the drama of an established trend, it’s called a runaway (or continuation) gap. Exciting stuff! 🎨

Let’s not forget, unlike Bitcoin’s spot market that’s open 24/7 as if it has no bedtime, CME bitcoin futures operate a modest 23 hours a day, hustling Sunday through Friday. They open at 5 p.m. CT (23:00 UTC) and close up shop for an hour at 4 p.m. the next day – it’s basically the introverted cousin of crypto trading. 🕔

After Trump’s elaborate victory dance on Nov. 4, a runaway gap strutted onto the CME futures stage the very next day, opening at $81,210 and leaving behind the sobering election-day high of $77,930 like it was yesterday’s news.

Traders have a persistent belief that price gaps are akin to unfinished business and will eventually be filled. This phenomenon is thought to be a natural market behavior—more predictable than a catwalk model swooping in to snag a last-minute outfit. 🐱‍👤

“Historically, CME gaps are eventually filled, but timing is everything,” said Nicolai Sondergaard, a research analyst and self-proclaimed bearer of wisdom from Nansen, in a Telegram chat that probably has more alerts than a fire drill. “The recent unexpected events have caused these dramatic downward movements; without them, we might not even be talking about the CME gap.”

As it happens, Nansen’s risk indicators have gone full ‘risk-off,’ so it wouldn’t be too surprising if this CME gap were filled sooner rather than later. Buckle up! ⏳

Now, shifting gears a bit: technical analysis has an amusing way of explaining things, suggesting that while common gaps and exhaustion gaps may get filled quickly, the runaway gaps are about as likely to be filled as your fridge is to stay stocked on a Friday night. 🍕

Interestingly, another gap emerged between Feb. 24 and Feb. 25 as prices fell out of their elongated catnap. Which gap will get prioritized in this strict competition remains a mystery, one that would keep even Sherlock Holmes guessing. 🤔

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2025-02-27 15:53