Bitcoin & CME Gap Mania
How low can Bitcoin go?
Welcome to the Rekt Capital Newsletter, a resource for investors who want to better navigate the crypto markets with the help of cutting-edge crypto research and unbiased market analysis.
CME Gaps Galore
Last week, Bitcoin filled two CME Gaps: one between $78000 and $80700, and the other was technically filled yesterday between $92800 and $94000 but officially formalised with the opening of CME Futures earlier today.
But over the weekend, BTC formed yet another, much larger CME Gap between $84600 and $93300.
And today, BTC has almost completely filled that gap already.
Overall, this CME Gap fulfilment is all about Bitcoin trying to form a Higher Low relative to the extreme high-$70k lows of last week.
The Downside Deviation
Bitcoin performed a tremendous downside deviation below its current Re-Accumulation Range late last week, repeating the historical tendencies that have been occurring throughout the current cycle.
Downside deviations in the form of downside wicking have been occurring in earlier parts of the cycle but as the cycle has progressed, price has demonstrated it can perform these downside deviations in the form of entire clusters of candle-bodies below the Re-Accumulation Range.
For BTC to perform a long downside wick last week and also Weekly Close above the $93500 ReAccumulation Range Low support was an impressive technical feat.
Going forward, price will try to find a middle-ground between maintaining the $93500 Range Low and building stability there all the while fulfilling the CME Gap below as much as possible, solidifying a basing period at around current levels and solidifying also a Higher Low relative to last week's low.
History suggests such extreme downside wicks have tended to coincide with the bottoms of pullbacks and so building out a Higher Low on this current, second downside deviation (which ought to be shallower) should see price behave in line with tendencies we've see throughout the entire cycle thus far.
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