Bitcoin is currently navigating a choppy market, experiencing a 2.5% dip that has reignited concerns about a potential collapse towards the $100,000 mark. This downturn has brought into focus a significant CME (Chicago Mercantile Exchange) gap that exists below the current price level, a factor that often influences Bitcoin's price action.
As of today, Bitcoin is trading around $108,076, demonstrating a slight recovery of 1.22% in the last 24 hours. However, this follows a recent selloff that saw it dip below $104,000 on Friday. Despite the recent volatility, Bitcoin has gained 18% since the start of the year, although it remains significantly below its all-time high of approximately $126,000 reached two weeks ago.
The CME gap, which is around the $110,000 level, is a key area of interest for traders. These gaps occur because the CME's Bitcoin futures market closes over the weekend, unlike the continuous crypto market. Historically, Bitcoin tends to move towards filling these gaps, acting as a "magnet" for price action. To fill the current gap, BTC/USD would need to decrease to around $110,000.
Analysts are closely watching key support levels around $100,000 and $93,000, as well as resistance levels near $117,000 and $123,000. Bitcoin has found some buying interest near the lower trendline of a three-month trading range and the rising 200-day moving average.
Technical analysis reveals that Bitcoin has rebounded from an "institutional demand zone" near $106,000, reclaiming short-term structure levels. Reclaiming the $114,000-$116,000 range is crucial to confirm a bullish continuation towards previous all-time highs. The 100-day moving average, currently around $115,000, acts as immediate resistance. A close above $116,000 could pave the way for a retest of the $120,000-$122,000 supply zone, followed by the prior $125,000 all-time high. However, failure to reclaim this range could lead to another retest of the $102,000-$104,000 demand area.
On-chain analysis shows that the Bitcoin MVRV Ratio (Market Value to Realized Value) is currently near 1.9, slightly below its 365-day moving average. Historically, drops below this moving average have signaled buying opportunities and local bottom signals. This pattern suggests that the market may be entering an undervaluation phase, where long-term holders may begin accumulating.
Looking ahead, several factors could influence Bitcoin's price, including upcoming U.S. economic data, prospects for favorable crypto legislation, and trade developments between the U.S. and China. The potential for a Federal Reserve rate cut is also being closely watched, as lower borrowing costs typically lead to increased liquidity and a stronger appetite for risk assets, which could benefit Bitcoin. The CME FedWatch Tool indicates a high probability of a rate cut at the next meeting.
Despite the recent correction, fundamentals in the crypto market remain strong, with institutional adoption still in its early stages and expected to continue growing. However, renewed U.S.-China trade frictions and prolonged U.S. government shutdown risks could complicate near-term sentiment.
