Filling old CME gaps...This is just a crazy analysis of the possibilities of filling an old CME gap, mentioned at $9,700-$9,850.
The past few days and weeks have been very volatile with huge, possibly coordinated and sustained dumps. So what are the possibilities of going lower? What could be the bottom?
As we are now at another unexpected crossroad in the crypto saga, we will all be looking for answers and potential scenarios of what will happen next. As much as the fundamentals of crypto have never been stronger, short-term uncertainty will always loom over our heads. Oftentimes we will look at indicators, trendlines, levels, news and social sentiment for answers. But the market does what it does, and whales do what they do, so we are all just left with best guesses.
One interesting factor for the movement of crypto is CME gaps. There will be many CME gaps on the way up, and most will be filled quickly. Some may never be filled, and some could be filled after a long time, sometimes by unexpected events like the coordinated dump going on at this time of writing.
We are currently hoovering below $40,000 and a daily close below $37,250 could lead to a much deeper drop. I will be speculating on how low it could, go based on unfilled CME gaps and somewhat arbitrarily placed trendlines and Fibonacci levels, possibly leading to a worst case scenario of filling an old CME gap.
The biggest unfilled gap would be one at $9,700-$9,850, with another mentioned at around $3,000. I can't actually see the gap in my chart on any timeframe, but it is mentioned in these articles... Edit: I had to remove the links to the articles to post this piece, but they can easily be found by Googling "CME gap 9700".
(Removed link...)
On the chart I have also indicated some of the more recent unfilled CME gaps found on the Binance chart. Some are micro-gaps of of $0.01, and some are bigger. Will they still get filled? Could it happen due to the coordinated dump, leading to a flash-crash, and will the drop be exasperated by government regulation, environmental concerns and eroded confidence in Bitcoin due to manipulation?
Back to the CME gaps...
Some CME gaps on the 15 min timeframe that I have identified are found at:
$33,500.00-33,534.58
$32,299.84-32,438.06
$21,331.69-21331.70
(there could be more...)
What could be the levels we hit? Well, I was once taught that confluences are strong indicators, and by drawing up some trendlines and Fib levels we can check if there are any confluences worth noting...
With a Fib retracement from the recent peak of $64,854 on April 14, 2021 to the low of $3,782.13 in March 13, 2020, we can see that we have levels at:
$51,784.62
$41,524.55
$34,318.07
$27,111.58
$18,195.09 (level to note)
And with another Fib retracement from the recent peak to the recent dip at $43,960 on April 25, 2021, we get a closely coinciding level at $17,928.97 as a level to note.
This would indicate a strong support/resistance level can be found at around $17,928.97 to $18,195.09, as can be seen in the chart. We could bounce here, but dropping below this could lead to a much deeper decline, possibly to the next Fib confluence level. So where could that be?
Well, drawing a a Fib retracement from the recent peak to the recent drop to $30,000 gives us a Fib 1.68 level at $8,460.23.
Drawing yet another Fib retracement from the Jan 9, 2021 peak to the Jan 22, 2021 drop, gives us a closely coinciding level at $8,576.46 (Fib 2.618).
This would indicate a strong support/resistance level at $8,460.23-$8,576.46, a bit below the mentioned $9,700 CME gap.
Furthermore, drawing a trendline from the Dec 17, 2017 peak to the Aug 17, 2020 peak leads us to a point just above the CME gap at around $10,375 if looking at our current date (May 22, 2021). The further in time we go, the lower this level will be, and we don't know how long this dump will go on before it reaches its target. By August 20, 2021 we would be below the line, if the bearishness would go on that long. A flash-crash would naturally bring us below the trendline much sooner.
Hitting this trendline would be sort of a second retest of the "breakout" of our current bullrun, if we can consider the start at Jun 20, 2020. With some panic leading to a flash-crash, eroded confidence in Bitcoin and Crypto, we are not to far from hitting the CME gap at $9,700-9,850 and potentially staying there long enough to fill it.
Will this ever happen?? It's far-fetched, but nothing is certain or impossible in the world of crypto. Especially not with huge market manipulators controlling a majority of the assets and governments fighting for control of our old and future monetary system.
Where could we go after a drop to the CME gap? With a Fib grid from the low of $3,782.13 to the peak of $64,854 we can find the 1.618 Fib level at $102,596. The 1.618 level is a level that often gets reached. The next level would be $163,668. Will this happen, if so when and how long would it take? We'll just have to wait and see.
This is just an exercise I made for fun, and not financial advise of any kind.
Be safe trading, do your own research, and be kind if you leave a comment. =)
