The Bitcoin (BTC) price dropped by 2 percent in an hour in a sharp correction on November 2, caught traders off guard. Coincidentally, the CME Bitcoin futures market opened with a new gap, bringing the $ 13,100 level into the limelight for sellers. While the cryptocurrency traded at $ 13,700, around 12 noon it first fell to $ 13,400 and then to $ 13,255. At the time of writing, it changes hands at $ 13,323.
Three technical reasons triggered the sudden drop in Bitcoin price: the CME deficit, great resistance, and monthly moving averages, reports Joseph Young on Cointelegraph.
There are now four CME Bitcoin futures openings
The CME Bitcoin futures market closes on weekends and holidays. This means that if BTC sees a major price movement in those days, a gap / gap arises between CME and cryptocurrency exchanges. While there is no comprehensive theory as to why traders move to fill CME futures gaps, historically most CME Bitcoin gaps have been filled.
Since October, Bitcoin has experienced a strong rise. According to the author, as the market becomes less active during the weekend, BTC’s volume tends to decrease. However, the BTC volume has not declined over the past few months, and has even moved upwards continuously.
Consequently, this resulted in the formation of four consecutive CME gaps. Each weekly candle last month led to a rare new CME gap for Bitcoin. This means that BTC is moving very fast on the weekends and new gaps are forming one after another.
The gaps are found at 13,100, 12,970, 11,505 and 11,100 dollars. These areas can also be thought of as the levels that sellers are interested in. Coincidentally, the range of $ 12,970 to $ 13,100 is an important area in terms of moving averages.