Bitcoin Price Soars: Will the Crucial $117K CME Gap Be Filled?
The cryptocurrency world is buzzing as Bitcoin (BTC) price action once again tests new all-time highs. A swift surge recently propelled Bitcoin beyond $122,000, signaling potential price discovery on the horizon. However, amidst this bullish momentum, market participants are closely monitoring a key development: the weekend’s CME gap, which pinpoints $117,000 as a potential retracement target. This article delves into the critical factors influencing Bitcoin’s trajectory this week, including macroeconomic data, whale behavior, and exchange premiums, providing a comprehensive look at the current crypto market landscape.
Bitcoin Price Action: Surging Towards All-Time Highs
Bitcoin’s journey into the new week began with remarkable strength. Following the weekly close, BTC/USD quickly advanced, pushing past the $122,000 mark. Local highs reached $122,312 on Bitstamp before a slight retracement commenced. This rapid ascent resulted in the liquidation of over $100 million in short positions, clearing a significant wall of liquidity just below Bitcoin’s previous all-time highs.
Data from monitoring resources like CoinGlass now indicates that resistance is building around $123,000 and higher. Despite the excitement, many market participants remain cautiously optimistic. Crypto trader and analyst Michaël van de Poppe noted the weekend move. He suggested that some tests on lower levels might occur before a sustained continuation upwards. Such a downward test could, however, present a ‘buy the dip’ opportunity for altcoins.
A notable bullish signal comes from overall leverage trends. Popular trader BitBull observed that the ratio of leveraged futures to spot buying is nearing lows last seen during Bitcoin’s bear market in late 2022. This suggests that the current rally is driven by genuine spot demand rather than speculative leveraged positions, implying a more robust and sustainable upward trend for the **Bitcoin price**.
BTC/USD one-hour chart. Source: Crypto News Insights/TradingView
BTC liquidation heatmap (screenshot). Source: CoinGlass
BTC/USDT four-hour chart with RSI data. Source: Michaël van de Poppe/X
Bitcoin futures to spot ratio. Source: BitBull/X
The Critical $117K CME Gap and Its Implications
For many traders, discussions about a potential **BTC price** dip inevitably turn to the CME gap. The recent weekend surge created a new gap in CME Group’s Bitcoin futures. Observers are now keenly watching for its potential ‘fill.’ This particular gap spans between $117,000 and $119,000. Historically, CME gaps often get filled, with prices returning to close the void, sometimes within days or even hours.
Trader Jelle acknowledged this possibility, stating that a quick fill could occur this week. Completing this latest gap would bring BTC/USD back to just above $117,200. This level holds significance as a previous resistance/support flip zone. Rekt Capital, a popular trader and analyst, recently emphasized the importance of reclaiming the $117,200 mark. This level was seen as key to the overall Bitcoin price recovery from a ‘cycle of downside deviations.’ Therefore, the market’s reaction to this **CME gap** will be closely scrutinized.
CME Bitcoin futures one-hour chart. Source: Crypto News Insights/TradingView
BTC/USD one-week chart. Source: Rekt Capital/X
Crucial US Macro Data: CPI, PPI, and the Federal Reserve
This week’s economic calendar features significant releases: the July prints of the US Consumer Price Index (CPI) and Producer Price Index (PPI). These data points are vital for gleaning policy signals from the Federal Reserve. Interest rates remain a top concern for risk-asset traders, especially with continued pressure on the Fed to act.
The Kobeissi Letter, a trading resource, highlighted the importance of this week’s inflation data for the upcoming September Fed meeting. Current data from CME Group’s FedWatch Tool indicates high market expectations for a rate cut next month, with nearly 90% odds. This contrasts sharply with the 57% figure from just a month ago. BitBull suggests that if CPI comes in lower than expected, the September rate cut will be confirmed, which would further boost risk-on assets, including the broader **crypto market**.
Conversely, a higher-than-expected CPI could reduce rate cut probabilities and potentially lead to lower crypto prices. However, given the recent rise in the unemployment rate, a lower CPI is generally anticipated, which would be favorable for markets. Several senior Fed officials are also scheduled to speak this week, potentially offering more insights into the central bank’s stance.
Fed target rate probabilities for September FOMC meeting (screenshot). Source: CME Group
Whale Behavior and Coinbase Premium Insights
On-chain analytics offer further insights into Bitcoin’s immediate future. CryptoQuant contributor Amr Taha identified a correlation between large Tether (USDT) transfers on the TRON blockchain and BTC/USD corrections. Specifically, when daily $10M+ USDT transactions exceed $5B, it often signals significant profit-taking in Bitcoin. For example, spikes in whale USDT transactions on July 16 and July 23 preceded Bitcoin price corrections of 4.5% and 3.8%, respectively.
Currently, however, whales do not appear to be cashing out into USDT. The lack of large $10M+ transactions suggests that major holders are not yet looking to reduce their risk exposure. This indicates a potential lack of immediate selling pressure from these large entities, which could support the current **Bitcoin price** strength.
USDT TRC-20 daily wallet balance change data (screenshot). Source: CryptoQuant
Another area of concern for the strength of the recent Bitcoin breakout is the Coinbase Premium Index. This index measures the price difference between BTC on Coinbase (USD pair) and Binance (USDT pair). A negative premium, as recently observed, suggests a lack of sustained buying interest from Coinbase users. This can put pressure on prices during US trading sessions. J. A. Maartunn of CryptoQuant questioned if this signals a ‘pump and dump’ scenario after the price jump from $118K to $122K. This metric is crucial for understanding demand from institutional and retail investors in the US.
Coinbase Premium Index. Source: CryptoQuant
Looking Ahead: Market Sentiment and Volume
As the market gained momentum, popular trader Roman stressed caution regarding trading volume. While a break of large resistance is positive, low volume can indicate a lack of conviction behind the move. This applies not only to Bitcoin but also to altcoins like Ether (ETH), which recently hit its highest levels since late 2021. Roman highlighted ‘bear divs and low volume’ as issues, stating that ‘High Volume ALWAYS validates breakouts.’ This suggests that a period of sideways movement or slight retracement might precede further upward action for both BTC and ETH.
The convergence of technical indicators, macroeconomic data, and on-chain metrics paints a complex but exciting picture for Bitcoin this week. While the allure of new all-time highs is strong, the potential for the $117K CME gap to be filled remains a significant consideration. Traders and investors will closely watch the upcoming CPI and PPI data, along with whale movements and exchange premiums, to gauge the market’s true direction. The **Federal Reserve**’s stance on interest rates will also play a pivotal role in shaping risk-on asset performance.
ETH/USD one-hour chart with volume data. Source: Crypto News Insights/TradingView
