Bitcoin’s price has plummeted nearly 30% from its all-time high, wiping out the so-called “Trump pump.” As reported by Cointelegraph, traders have been closely watching a significant CME futures gap that formed during Bitcoin’s surge past $100,000. That gap, located around $78,000, is now nearly filled. Historically, CME gaps tend to act as price magnets, pulling Bitcoin back to levels where trading activity had previously been absent.
Crypto analyst Rekt Capital confirmed on X that Bitcoin is “getting closer and closer to filling its CME gap formed back in November 2024.” If this gap is fully closed, some traders anticipate a relief bounce, potentially sending BTC back toward the $92,000 region, where another CME gap remains open.
Whales Stack Up Bids at Lower Levels
Despite the panic, large traders appear to be taking advantage of the dip. According to Daan Crypto Trades, around $1.8 billion in Bitcoin buy orders have emerged between $70,000 and $79,000 on Binance futures. While these bids could be pulled at any moment, they suggest that institutional investors see value at these lower levels.
Meanwhile, blockchain analytics firm Glassnode reports that over $3 billion in long positions have been liquidated in the past five days. This rapid unwinding of leveraged positions has exacerbated Bitcoin’s decline, making it a textbook case of a “falling knife.”
Is This Just a Retest Before the Next Rally?
While many are fearful, some analysts see Bitcoin’s current dip as a classic “breakout and retest” play. As noted by CoinDesk, markets often revisit former resistance levels to confirm them as new support before resuming their upward trajectory. Bitcoin’s previous resistance at $73,757—broken in November—could now serve as a crucial support zone.
If Bitcoin holds these levels, history suggests a potential rebound. In both 2020 and 2023, similar retests led to strong rallies that pushed Bitcoin to new all-time highs. However, if support fails, a deeper correction could unfold.
Market Sentiment Remains Fragile
While technical indicators suggest a possible bottom, broader market sentiment remains shaky. The Kobeissi Letter points out that Bitcoin has shown increased correlation with traditional stocks, which have been under pressure due to concerns over new U.S. tariffs on Canada and Mexico. The resulting economic uncertainty has driven investors toward the U.S. dollar. As a result, this has naturally weakened demand for risk assets like Bitcoin.
At the time of writing, Bitcoin is sitting at $80,225.98.
