Bitcoin V-Shaped Reversal, CME Gap Could Be the Biggest "Risk"
Original Article Title: "After Bitcoin's V-Shaped Reversal, Could the CME Gap Be the Biggest 'Hidden Danger'?"
Original Source: BitpushNews
Over the past 24 hours, Bitcoin has staged a V-shaped reversal drama, hitting a low of $90,000, an eight-week low, and bouncing back above $94,000 after the U.S. stock market close, with the market's longs and shorts in a tense situation. Bitcoin's price has dropped over 7% in the past week. Although its market cap continues to hover around $1.864 trillion, its dominance has slightly decreased to 54.2%.

Macroeconomic Factors Lead to Temporary Market Cooling
Experts believe that the pullback that began last week is attributed to optimistic U.S. economic data, including better-than-expected initial jobless claims and labor participation rate. This data has heightened concerns that interest rates may remain high for a longer period than expected.
Chris Chung, CEO and Founder of Titan, stated: "The market seems very concerned that there won't be any more rate cuts in 2025, especially given the incredibly strong jobs report released on Friday. But we also saw a big rally in December, so it's not uncommon for the market to readjust after such a large rally."
He pointed out that with U.S. President-elect Donald Trump set to be inaugurated next week, there is still "further downside risk" in the cryptocurrency market.
Chris Chung said: "Everyone expects Trump to announce regulatory support for cryptocurrency on day one, but he may start with more pressing issues given the Republican control of the House and Senate, along with macro concerns and upcoming token unlocks, this market adjustment may continue into February or even March."
James Butterfill, Head of Research at CoinShares, stated in his fund report: "The honeymoon period after the U.S. election is over, and macroeconomic data once again becomes a key driver of asset prices."
Derivatives Data Shows Sentiment Ranges from Mildly Bullish to Neutral
It is worth noting that the reaction in the Bitcoin derivatives market has been relatively mild.
Firstly, the futures premium is high, as Bitcoin futures contracts typically trade at a premium to the spot market, reflecting market optimism about future prices. Data shows that the current annualized premium rate is at 11%, above the 5%-10% neutral range, indicating that market participants overall remain optimistic.
Another indicator is the perpetual contract funding rate (usually reflecting market sentiment). Although on January 13, due to a large number of short positions entering the market, the funding rate briefly turned negative, accompanied by $1.07 billion in long liquidations. However, it quickly rebounded to around 0.5% monthly rate, showing that the market did not exhibit sustained bearish sentiment.

CME Gap Pressure, Will It Be Filled?
Analysts say there is a gap between $88,500 and $77,500 on the CME chart. When there is a difference in the Bitcoin futures price between the close of one trading day and the open of the next trading day, a CME gap occurs, which usually causes Bitcoin to tend to return to a certain level. If Bitcoin faces a downward correction, this gap represents a potential bearish target.

Analysts believe that given Bitcoin's current price of around $94,000, a drop from this level could lead to a significant pullback, potentially resulting in a decline of up to 18% to fill this CME gap.

In addition to the CME gap, veteran market analysts like Peter Brandt also point out a potential bearish signal on the Bitcoin daily chart. Brandt suggests that a head and shoulders pattern could form, which may indicate that the Bitcoin price could fall to $73,000. However, Brandt also warns against relying too heavily on this chart as BTC's high volatility often leads to changes in chart patterns.
Therefore, Bitcoin's current trend is influenced by multiple complex factors. While the derivatives market remains relatively calm, the presence of the CME futures market gap, a potential head and shoulders pattern, and key support levels increase the risk of a price downturn. If Bitcoin continues to face pressure, the market will closely monitor whether it will fill the CME gap, which could trigger significant market volatility.
You may also like

What Happened in Crypto Today? Solana-Native Rails Launch on Digitap ($TAP) as the Best Crypto to Buy
Key Takeaways Digitap ($TAP) spearheads the transition toward real-world utility in cryptocurrency, offering a seamless financial ecosystem through…

Here’s Why Fed Contender Kevin Warsh is Seen as Bearish for Bitcoin
Key Takeaways Kevin Warsh is a potential nominee for the U.S. Federal Reserve chair, causing concerns due to…

XRP Breaks Below Its 1-Year Support Range: What’s Next?
Key Takeaways XRP has slipped below its critical support range of $1.8 to $2.1, which had been steadfast…

XRP Price Breakdown Intensifies — Can Support Mitigate the Shock?
Key Takeaways XRP has dipped below the significant $1.80 mark, continuing its downtrend. The asset is trading beneath…

XRP Risk-Adjusted Returns Suggest a Period of Consolidation – Insights and Analysis
Key Takeaways: XRP’s recent price fluctuations highlight a lack of strong market momentum for a trend reversal. The…

Kevin Warsh Associated with Crypto Project Basis and Electric Capital
Key Takeaways Kevin Warsh, former U.S. Federal Reserve Board Governor, is associated with crypto initiatives Basis and Electric…

Why is Trump’s Fed Chair Pick Kevin Warsh Seen as Bad News for Precious Metals, Commodities, Bitcoin, and Equities?
Key Takeaways: Kevin Warsh, once appointed, is expected to take a more hawkish stance on monetary policy, which…

Who Is Kevin Warsh? How His Fed Chair Odds Are Influencing Bitcoin Markets
Key Takeaways Kevin Warsh, a former Federal Reserve governor, is becoming a strong candidate for the next Fed…

Strategy (MSTR) Stock: Michael Saylor’s Bitcoin Bet Goes Red But Here’s The Twist
Key Takeaways Strategy’s Bitcoin investment has dipped below its average purchase price, highlighting market volatility. No immediate financial…

Gov-Backed Asset or Solana Meme? Uncovering the Reality Behind the USOR Crypto Frenzy
Key Takeaways USOR, a Solana token, sparked a debate over its legitimacy by claiming associations with U.S. strategic…

Bitcoin Hashrate Falls 12% After US Winter Storms Hit Miners
Key Takeaways: The total network hashrate for Bitcoin has declined by approximately 12% since November 11, marking the…

Gold’s Six-Month Rally Against Bitcoin Shows Parallels to 2019 Cycle
Key Takeaways Gold has consistently outperformed bitcoin over the last six months, despite being typically considered the haven…

Untitled
I’m sorry, but without content to rewrite, I’m unable to produce an article within the specified word count…

Mantle’s Cross-Chain Era on Solana: Onboarding the Bybit Express to Mantle Super Portal
Key Takeaways Bybit joins forces with Mantle to enhance cross-chain asset flows through the Mantle Super Portal. Mantle…

XRP Price Outlook for 2026: Is Bitcoin Hyper Part of Long Term Themes?
Key Takeaways The potential future of XRP in 2026 is significant, with various factors influencing its growth and…

Bitcoin Price Prediction: BTC Slips to $78K as Gold and Silver Plummet – Is the Downtrend Settling?
Key Takeaways Bitcoin and traditional safe havens like gold and silver experience synchronized declines in a volatile market…

$30 Million Heist: Step Finance Treasury Wallets Breached
Key Takeaways Step Finance, a prominent Solana-based DeFi platform, faced a significant security breach, losing approximately $30 million…

Bitcoin Price Prediction: $50B Volume Drops 40% as BTC Tests $83K – Is a Breakdown Next?
Key Takeaways: Bitcoin’s trading volume has seen a significant decline, indicating cautious trader behavior. Bitcoin prices remain under…
What Happened in Crypto Today? Solana-Native Rails Launch on Digitap ($TAP) as the Best Crypto to Buy
Key Takeaways Digitap ($TAP) spearheads the transition toward real-world utility in cryptocurrency, offering a seamless financial ecosystem through…
Here’s Why Fed Contender Kevin Warsh is Seen as Bearish for Bitcoin
Key Takeaways Kevin Warsh is a potential nominee for the U.S. Federal Reserve chair, causing concerns due to…
XRP Breaks Below Its 1-Year Support Range: What’s Next?
Key Takeaways XRP has slipped below its critical support range of $1.8 to $2.1, which had been steadfast…
XRP Price Breakdown Intensifies — Can Support Mitigate the Shock?
Key Takeaways XRP has dipped below the significant $1.80 mark, continuing its downtrend. The asset is trading beneath…
XRP Risk-Adjusted Returns Suggest a Period of Consolidation – Insights and Analysis
Key Takeaways: XRP’s recent price fluctuations highlight a lack of strong market momentum for a trend reversal. The…
Kevin Warsh Associated with Crypto Project Basis and Electric Capital
Key Takeaways Kevin Warsh, former U.S. Federal Reserve Board Governor, is associated with crypto initiatives Basis and Electric…