The Bitcoin price has regained momentum, rising toward the $120,000 level after experiencing a short-lived pullback earlier this week. However, recent technical analysis warns that an unfilled Chicago Mercantile Exchange (CME) gap near $116,500 may act as a barrier, potentially creating the risk of a price crash as BTC makes its way toward a fresh all-time high. 

Bitcoin To Face Short-Term Crash With CME Gap

A new Bitcoin price analysis by crypto market expert Ted Pillows suggests that BTC could encounter another major hurdle on its path to a record high. His analysis, shared on X social media, points to conditions in cryptocurrency’s current market structure that may trigger a temporary correction. 

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Notably, Pillows reported that Bitcoin recently reclaimed and even surpassed the $118,000 level after a volatile week that saw the asset shed $2,000 to fill a CME gap from last week. The analyst’s chart highlights this gap in Bitcoin’s price action on the CME futures market around $116,500. Historically, such gaps tend to be “filled” as price retraces to trade within the missing range, making them critical areas of interest for traders. 

Pillows has stated that the unfilled CME gap near $116,500 will likely be revisited soon. This week’s market action already saw BTC drop sharply to close last week’s gap before rebounding, suggesting that the same pattern could play out again. If the $116,500 CME gap is filled, it could momentarily disrupt Bitcoin’s ascent, triggering a potential crash in its price. 

Although this scenario appears bearish, the analyst reassures that any pullback is expected to be temporary. Pillows anticipates that a brief correction could lay the groundwork for a fresh leg upward. Technical patterns also indicate that once Bitcoin begins this upward push, it could rise toward uncharted territory and establish a new all-time high. 

Other Analysts Share Their Take On Bitcoin CME Gap

Further discussing the Bitcoin CME gap, market analyst ‘Daan Crypto Trades’ on X pointed out the recently formed gap that opened this week. According to the analyst, the gap lies between $116,500 and $118,400, standing out not only for its size but its proximity to Bitcoin’s previous ATH range.

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Daan Crypto Trades noted that most CME gaps tend to close within the same day; however, this latest gap has extended farther than usual. He explained that the gap near Bitcoin’s record high creates the ideal conditions for a price discovery. In such scenarios, CME gaps often stay open for longer periods, as bullish momentum can drive prices upward without retracement. 

Notably, the expert’s chart analysis indicates that Bitcoin’s latest CME gap is unlikely to close until its price comes within 1% or 2% of it, placing that level just under $120,000. At present, BTC is trading at $121,313. 

Featured image from Pixabay, chart from Tradingview.com

Bitcoin price stepped above $31,000 on Tuesday, although briefly. The extended weekend in the US left the crypto market quiet apart from the ongoing rout in the NFT space, which has seen many assets fall to extremely low floor prices.

Toward the end of the Asian trading session, Bitcoin price is down 1% to $30,845. Similarly, Ethereum is down 1% to $1,938. Considering the 1% dip in the total market cap to $1.25 trillion, the crypto market performance is expected to stay relatively depressed going into the weekend.

How to Navigate Bitcoin Price Technical Outlook

As investors step into the market from the long weekend, they’ll quickly realize that trading volume is down across the board. According to data from CoinGlass, all major exchanges continue to report sharp drops in volume in the range of 15-20%.

This significant drop in volume impacted the number of liquidations, summing to $47.67 million in the last 24 hours.

Intriguingly, the market has managed to sustain open interest at $14.50 billion, with the long/short ratio revealing that long traders have a slight upper hand over short traders.

On the other hand, trader sentiment is still a cause for worry, with a large portion of neutral traders equalizing the bearish and bullish crowd.

Where Is Bitcoin Price Heading?

The liquidity crunch in the market, according to CoinDesk, is a long-standing factor and cannot be wished away, considering it stems from fiat. Crypto and other risk assets, such as tech stocks, are the most affected.

However, given the influx of significant economic data slated for release this week, traders must be prepared to proactively respond as circumstances dictate.

Meanwhile, Bitcoin price is dealing with the stubborn resistance at $31,000, with its downside seemingly protected at $30,500. The largest cryptocurrency’s options are narrowing each passing day that it doesn’t uphold the upward trajectory beyond the $31,000 mark.

This means that overhead pressure will likely keep weakening support, especially the buyer congestion at $30,000. A confirmed break below this price point would imply a defeated bullish front.

On the other hand, it may trigger an aggressive bearish front, with investors likely to sell to protect accrued profits following the uptick from $25,000 to $31,500.

Pressure is likely to shoot up if short traders capitalize on an incoming sell signal from the Moving Average Convergence Divergence (MACD) indicator. This call to sell BTC would manifest when the MACD line in blue crosses below the signal line in red.

Generally, the movement of the momentum indicator as it drops toward the mean line (0.00) and possibly the negative region would tighten the bearish grip—a move likely to trigger a selloff below $30,000.

Some of the key levels that traders must keep in mind are the resistance at $31,000 and support at $30,000. Notably, a break and hold above $31,000 would encourage more investors to join the bandwagon, targeting a breakout to $35,000 and $38,000.

Bitcoin may be in grave danger of dropping to $25,000 in the event support at $30,000 crumbles. Traders must consider the tentative buyer congestion at $28,000, which might allow Bitcoin to sweep through fresh liquidity ahead of a kneejerk bullish reaction.

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John is a renowned crypto analyst and journalist, providing expert insights into both broad and focused aspects of the digital asset market. As a steadfast reporter, he keeps his audience updated with the latest news in the crypto sphere, delving into topics such as price trends, on-chain data analytics, Non-Fungible Tokens (NFTs), Decentralized Finance (DeFi), Centralized Finance (CeFi), and the ever-evolving metaverse.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.