The Friday before last, the Bitcoin futures contract on the Chicago Mercantile Exchange (CME) closed the week at $8,715. It was a strong performance, especially considering that on Wednesday of that week, the leading cryptocurrency had plunged to $7,300 in a flash crash event.
The thing is, shortly after the CME closed up shop for the week, Bitcoin rocketed higher. As you well know, the cryptocurrency reached as high as $10,600 as a monumental influx of buying pressure allowed BTC to post its highest daily gain since 2011, at 42%.
Thus, when the CME’s futures opened on Monday morning, a gap of around $1,000 was created. While this may not mean anything in itself, Bitcoin has had a history of filling the gap, moving down or up to prices where the CME’s market didn’t trade at. As such, analysts have been calling for BTC to fall to $8,600 to “fill the gap” for over a week now.
And on Tuesday morning, these traders got their wish granted.
Bitcoin Gap Filled?
As seen in the chart below, the CME’s Bitcoin future for November suddenly plummeted in value on Tuesday morning (EST), falling from $9,400 to just under $8,300 in literally a few minutes, filling the gap in the high-$8,000s. This represented a 12% drop.
While some have suggested that this is a technical error on the CME’s behalf, the volume candles in the above chart show that trades were printed at these levels, implying that it was anything but a glitch.
Also, NewsBTC’s analysis has found that at the exact same time the CME’s future plummeted, the price of Bitcoin slipped on spot exchanges, albeit on a much smaller magnitude — $100 on spot exchanges compared to $1,000 for the futures.
According to a number of analysts, this gap-fill now means that Bitcoin is cleared for takeoff. Popular technical analyst “Escobar” argued earlier this month that before Bitcoin can continue its bullish advances, it will need to fill the gap.
Willy Woo, a prominent on-chain analysis, echoed this line in a tweet thread posted on Monday morning. Responding to the question, “Do you expect the $8600 gap to be filled?” he wrote:
“I think so, BTC has a tendency to fill volume profile gaps and especially gaps in the CME. We still have time to burn before the BTC rocket ship takes off, so a high chance to do that while the price wanders sideways in consolidation.”
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