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Some analysts have raised concerns that Bitcoin is at risk of a crash, caused by the Chicago Mercantile Exchange (CME) gap, causing its price to drop significantly.
Given that Bitcoin needs to close the gap, crypto traders predict that it could push the top cryptocurrency close to the critical CME gap, suggesting its price could drop as low as $77,000 per coin .
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Bitcoin could slide to $77,000
Crypto analyst Egrag Crypto suggested that the massive corrections Bitcoin has experienced could cause the coin to plunge all the way to the $77,000 mark.
Egrag added that since October 2022, the flagship cryptocurrency has suffered around seven considerable declines, adding: “The average decline during these events is approximately 23.53%.”
#BTC Drop – Average Dump and CME (70K-74K): how and why?
1⃣Average descent:
Since October 2022, #BTC experienced nearly seven significant declines. Here are the drop percentages:1) 22.70%
2) 20.18%
3) 21.70%
4) 21.42%
5) 23.27%
6) 25.82%
7) 29.65%📊 The average drop on… pic.twitter.com/Vz6QiZlnzF
– CRYPTO EGRAG (@egragcrypto) December 27, 2024
“From the current high of around 108,975, we see a potential decline towards the lower end of the CME GAP (between 77,000 and 80,000). This represents a decline of 25%, which is well in line with the average decline seen during this cycle,” Egrag said in an article.
Egrag also noted that the current weekly 21 EMA is around $80,000, suggesting that “another flash crash could be on the horizon.”
CME gap at $80,000
Another cryptocurrency analyst, XForceGlobal, reminded traders that “there is a CME 1D gap of $80,000.”
XForceGlobal said that historically, 90% of larger daily CME gaps have ultimately been filled since 2018.
Just a friendly reminder: there is a CME 1D gap of $80,000.
Statistically, since 2018, with the growing interest in gaps, 90% of 1-day time gaps above $1,000 have ultimately been closed (ignore anything below the 1D timeframe).
The tricky part with CME gaps is… pic.twitter.com/wJC2ih5U8M
– XForceGlobal (@XForceGlobal) December 24, 2024
However, the crypto analyst noted that it is difficult to predict the timeline and method to close the CME gaps.
“The tricky part about CME gaps is that their timing and method of filling remains unpredictable,” XForceGlobal said in an article.
The crypto analyst sees possible scenarios to fill the gaps in the CME. In one scenario, XForceGlobal suggests it could be subject to a deep wave or wave 4 correction, bringing Bitcoin back to between $77,000 and $80,000.
In another scenario, XForceGlobal said it could be filled “at a later stage via the supposed 1-2 correction after we finally finish the momentum of this bull run,” a scenario that could result in a fall in the BTC at $46,000.
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A market dump in January?
Egrag believes that market makers could take advantage of the upcoming inauguration of President-elect Donald Trump to trigger selling pressure on Bitcoin, contributing to its impending crash.
“Market makers are known for seizing opportunities in times of crisis. Expect a market drop on Inauguration Day (January 20, 2025). This could be the perfect local top for a sell-off, likely leaving many newcomers panicked,” the crypto analyst said.
Egrag outlined two scenarios that could play out from current market conditions, suggesting that in one scenario, Bitcoin could hit $120,000 and then suffer a fall towards the CME GAP before “resuming the bull run in 2025.”
In another possible scenario, the crypto analyst said that BTC could fall all the way to the CME gap of $70,000 to $75,000 before the bull run resumes.
Featured image from Pexels, chart from TradingView
