After Bitcoin’s V-shaped reversal, does the CME gap predict that it will fall to $70,000 in the future?

Macro factors caused the market to cool down temporarily.

Written by: BitpushNews

In the past 24 hours, Bitcoin staged a V-shaped reversal, hitting an eight-week low of $90,000, and rebounded to above $94,000 after the U.S. stock market closed. The bulls and bears in the market were anxious. In the past week, BTC has fallen by more than 7%. While its market capitalization continues to hover around $1.864 trillion, its dominance dropped slightly to 54.2%.

Macro factors cause the market to cool temporarily

Experts attribute the pullback that began last week to upbeat U.S. economic data, including stronger-than-expected jobless claims and the labor force participation rate. The data added to concerns that interest rates could remain high for longer than expected.

Chris Chung, CEO and founder of Titan, said: "The market seems very worried that there may not be another rate cut in 2025, especially with the incredibly strong jobs report released on Friday. But we also experienced in December There has been a sharp rise, so it's not unusual for the market to recalibrate after such a sharp rise."

He noted that there are still "further downside risks" to the cryptocurrency market as U.S. President-elect Donald Trump is due to be inaugurated next week.

Chris Chung said: “Everyone expects Trump to announce pro-cryptocurrency regulations on day one, but he may start with the more pressing issues of Republican control of the House and Senate, coupled with macro concerns and the upcoming With tokens unlocked, this market adjustment may continue into February or even March.”

James Butterfill, head of research at CoinShares, noted in his capital report: "The honeymoon period after the US election is over, and macroeconomic data has once again become a key driver of asset prices."

Derivatives data points to mild to neutral sentiment

Notably, the Bitcoin derivatives market’s reaction has been relatively muted.

First, the futures premium is relatively high. Bitcoin futures contracts are usually at a premium to the spot market, reflecting the market’s optimistic expectations for future prices. Data show that the current annualized premium rate has reached 11%, which is higher than the neutral range of 5%-10%, indicating that market participants overall remain optimistic.

Another indicator is the perpetual contract funding rate (which usually reflects market sentiment). Although on January 13, due to the large influx of shorts, the funding rate briefly turned negative, accompanied by a long liquidation of $107 million. But then it quickly rebounded to a monthly rate of around 0.5%, showing that the market did not have sustained bearish sentiment.

CME gap pressure, will it be covered?

Analysts say there is a gap between CME $88,500 and $77,500. A CME gap occurs when Bitcoin futures prices diverge at the end of one trading day and the start of the next, often causing Bitcoin to tend to retrace its steps back to a certain level. This gap represents a potential bearish target if Bitcoin faces a downside correction.

Analysts believe that given that Bitcoin is currently trading around $94,000, a decline from this level could result in a significant correction that could see losses as high as 18% to fill this gap on the CME.

In addition to the CME gap, senior market analysts such as Peter Brandt also pointed to potential bearish signals on Bitcoin’s daily chart. Brandt noted that a head and shoulders pattern (H&S) may be forming, which could signal a possible drop in Bitcoin prices to $73,000. However, Brandt also warned against relying too much on this chart, as violent fluctuations in BTC often cause chart patterns to change.

Therefore, the current trend of Bitcoin is complicatedly affected by multiple factors. While derivatives markets are relatively calm, gaps in the CME futures market, a potential head and shoulders pattern, and the presence of key support levels increase the risk of a downside price pullback. If Bitcoin continues to be under pressure, the market will pay close attention to whether it will cover the CME gap, which may trigger significant market fluctuations.