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Market analysts expect an imminent Bitcoin crash that would allow the asset to fill the latest visible CME gap on the 1-week chart.
In this latest Bitcoin price news, Bitcoin recently fell to $95,212 after briefly surpassing $99,000 during a Christmas rally. The market’s ongoing turbulence has triggered concerns about further declines, with analysts warning of a potential drop to $77,000 to close a critical CME gap.
Factors Pointing to Potential Bitcoin Drop
EGRAG, a prominent analyst, pointed out that Bitcoin has experienced several massive corrections since October 2022, with average losses of about 23.5%.
The current market environment suggests a similar pattern could unfold, with a potential decline aligning with the historical average. Notably, this would place Bitcoin’s next key support zone in the $77,000–$80,000 range, where a CME gap resides.
Notably, this CME gap occurred on the back of the early November uptrend following Donald Trump’s election victory. Bitcoin closed the week ending on Nov. 8 at $77,360 but then began the next week starting Nov. 11 at $81,210, creating the gap.
EGRAG also called attention to the 21-week EMA, which currently sits near $80,000. According to the analyst, this metric suggests the possibility of another flash crash to these levels.
In addition, EGRAG noted that market makers might exploit upcoming events, such as the U.S. presidential inauguration in January 2025, as a trigger for selling pressure. This is another event that could potentially contribute to the imminent crash.
However, he remains confident that Bitcoin will eventually reach $120,000 at some point. Nonetheless, EGRAG is unsure if the crypto asset will first rally to $120,000 before dipping to fill the CME gap or if it will immediately dip to the CME gap before rallying to the $120,000 mark.
Importance of the CME Gap
Meanwhile, XForceGlobal, another analyst, also highlighted the importance of CME gaps in Bitcoin’s price behavior. He stressed that historical data indicates that the market has eventually filled 90% of daily CME gaps larger than $1,000.
$BTC
Just a friendly reminder: there's a 1D CME gap at $80,000.
Statistically, since 2018, with the growing interest in gaps, 90% of 1-Day timeframe gaps larger than $1,000 have eventually been filled (ignore anything below the 1D timeframe).
The tricky part with CME gaps is… pic.twitter.com/wJC2ih5U8M
— XForceGlobal (@XForceGlobal) December 24, 2024
However, the timing and method of filling such gaps often remain unpredictable. The analyst outlines two scenarios: Bitcoin could experience a wave-4 correction, resulting in a drop to the $77,000–$80,000 range, or it could revisit this gap much later, possibly during a more significant market correction to the $46,000 level.
Other experts, like Ali Martinez, previously stressed the importance of Bitcoin holding its current support zone between $97,041 and $93,806. He contends that failure to maintain this level could lead to a decline to $70,085, given the lack of substantial support below this range.
The key support zone for #Bitcoin $BTC now lies between $97,041 and $93,806. If this critical demand area doesn't hold, we could see a sharp drop to $70,085, as there’s minimal support below. pic.twitter.com/cHdr5mKxhi
— Ali (@ali_charts) December 22, 2024
Further, Elliott Wave analysts suggest Bitcoin may not have completed its wave-B correction. Interestingly, if prices fail to break above $99,892 sustainably, a further decline could unfold, potentially taking the asset into the $80,000–$90,000 range.