X Force Global Analysis:
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In this analysis, we explore the Bitcoin CME Futures chart on the daily in order to understand the technical barriers that Bitcoin faces in its bullish rally.
Analysis
- A gap is an area discontinuity in a security's chart where its price either rises or falls from the previous day’s close with no trading occurring in between
- Gaps are common when news causes market fundamentals to change during hours when markets are typically closed, or when there are sudden movements within the market
- Regardless of the type of gaps, all gaps have a tendency of being filled.
- Tendencies indicate that while most gaps do get filled, understanding gaps from a probabilities perspective, sometimes gaps can be left unfilled
- The current chart for Bitcoin's CME Futures on the daily demonstrates that a major gap around 11.7k has been filled
- This gap had been in existence for almost a year, and was recently filled during Bitcoin's parabolic rally
- However, because Bitcoin's uptrend was so steep and sudden, the trend is extremely choppy, and has left a lot of gaps on its way
- There are major gaps around the following levels: 11.2k, 11k, and 9.8k
What We Believe
Given that these are all reasonable levels of correction targets, it's highly likely that we see a corrective move possibly filling the lower gaps below, before seeing another bullish rally to push forward beyond 14k levels.
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