Bitcoin Price Update

Bitcoin (BTC) has dropped 10% to $86,300 this week, breaking out of a prolonged trading range between $90,000 and $110,000.

Traders are closely examining charts for clues about future price movements following this bearish range breakdown. A key level of interest is the “runaway gap” below $80,000 in CME bitcoin futures that formed three months ago.

A gap represents a blank space on a price chart where there was no trading activity between the closing high of one day and the opening price of the next. A gap that appears within an established trend is termed a runaway or continuation gap.

Unlike the spot market for bitcoin, which operates 24/7, CME bitcoin futures trade 23 hours a day from Sunday to Friday. The trading opens at 5 p.m. CT (23:00 UTC) and halts for an hour the following day at 4 p.m..

After President Donald Trump’s election victory on Nov. 4, a runaway gap appeared in CME futures the following day, with prices opening at $81,210, above the election-day high of $77,930.

It is widely believed that gaps are eventually filled as traders navigate through the previously non-traded price zones. This behavior reflects a return to market equilibrium.

Nicolai Sondergaard, a research analyst at Nansen, stated in a Telegram message, “Historically, CME gaps are filled eventually, and it is usually hard to say when. Recent unexpected events have driven the significant downward movements. Without them, we might not have focused on the CME gap.”

According to Nansen’s risk indicators, the market has gone “risk-off,” suggesting a possibility of the CME gap being filled. However, technical analysis indicates that while common gaps and exhaustion gaps are usually filled quickly, runaway gaps have a lower likelihood of being filled.

Notably, a gap formed between February 24 and 25 as prices declined from prolonged consolidation. It remains uncertain which gap will be filled first.