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Bitcoin’s bulls have fought back against intense selling pressure that the cryptocurrency has faced over the past 12 hours, which previously led some analysts to believe that BTC was poised for a major drop back into the lower-$7,000 region.
If BTC had broken below its key support around $7,700, it is probable that it would have continued dropping until it reached around $7,200, as this is where it established strong support throughout late-2019.
Analysts are now noting that there is one factor that could mean Bitcoin is in for some massive gains in the near-term, with an open CME gap potentially being a catalyst for the next 50% rally.
Bitcoin Bounces From $7,700 as Bulls Shows Vitality
Currently, Bitcoin is trading up just over 2% at its current price of $8,050, which marks a notable climb from its daily lows of $7,700 that were set yesterday when bears attempted to generate enough selling pressure to force BTC to erase all of its recent gains.
Many analysts have speculated that this recent rally was being driven by BTC being treated as a safe haven investment by investors concerned about the tensions in the Middle East, although these tensions have shown signs of dissolving and the cryptocurrency’s bullishness momentum appears to remain strong.
UB, a popular crypto analyst and trader, explained in a recent tweet that in the near-term, he believes BTC could retest its recent highs around $8,300, with a break above this potentially marking the start of the next major uptrend.
“$BTC – Closed my short from $8,313 at $7,950s and flipped long. I don’t believe a retest of ~$8300s is out of the question. A weekend scamp pump to the Daily Pivot at $8550s isn’t out of the question either,” he explained.
$BTC – Closed my short from $8,313 at $7,950s and flipped long.
I don't believe a retest of ~$8300s is out of the question.
A weekend scamp pump to the Daily Pivot at $8550s isn't out of the question either. #Bitcoin pic.twitter.com/6AQsa4ov8B
— UB (@CryptoUB) January 10, 2020
Will a CME Gap Spark The Next Parabolic Rally?
Throughout all assets with futures trading, analysts often look for gaps created in the CME futures chart as signals for where the asset is heading next, as statistically these gaps are almost always filled.
This is also true with Bitcoin, which currently has an open gap at $11,855, which leads Josh Rager, another popular cryptocurrency analyst on Twitter, to note that BTC could soon move to fill this gap.
“$BTC – your latest Bitcoin gap update. Price has yet to make its way back down to $7,615 & has bounced at support. But wait, looks like the $11,855 gap remains unexplored from August ’19. As all CME gap fanatics pray that price doesn’t fill the $11k gap before the local gap,” he said.
https://twitter.com/josh_rager/status/1215611343526670336?s=21
If BTC moves to fill its local gap at $7,615 first, it will mean that the crypto has broken below its key support level at $7,700 and could mean that another capitulatory drop is imminent.
Regardless, the $11,855 gap that currently exists roughly 47% above where Bitcoin is currently trading is certainly something that may motivate bulls in the near-term
Featured image from Shutterstock.
