Bitcoin’s $1000 Breakaway CME Gap Demands Attention From Analysts

During the rapid Bitcoin price increase beginning on October 25, the Bitcoin CME futures chart has created a very large unfilled gap from $8800 to $9800. Unfilled gaps are often filled afterward and gaps, in general, often act as reversal points. Additionally, the unfilled CME gap could have been a catalyst for the rapid increase of October 24.

It is possible that the Bitcoin price is likely to decrease and fill the gap before resuming its upward movement. Trader @TheCryptomist outlined this gap in the tweet below.

$Btc

$1000 gap opened on the CME future chart pic.twitter.com/cOzG9orFrL

— The Cryptomist (@TheCryptomist) October 27, 2019

Let’s look at it closely, analyze the type of gap present, and hypothesize on what will it mean for future Bitcoin price movements.

Breakaway Gap

A  breakaway gap occurs when the price breaks out from a previous trading range with significant volume.

The current Bitcoin price gap has all the characteristics of a breakaway gap. It had been trading inside of a defined range (a descending wedge) since June 24.

The gap occurred with a very significant level of volume and took the Bitcoin price above the descending wedge. This makes it a breakaway gap.

Future Bitcoin Price Movement

As stated previously, when a gap is left unfilled, a very common movement is to return to those levels in order to fill the gap. In the case of the Bitcoin price, that movement would also coincide with a retest of the previous resistance line — a customary movement in breakouts.

Therefore, we would not be surprised if the Bitcoin price decreased to around $8700 — validating the resistance line before continuing its upward movement.

Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.

Images courtesy of Twitter, TradingView.

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