Bitcoin (BTC) prices are continuing to experience sharp fluctuations recently. Gaps in CME futures are historically considered critical indicators for Bitcoin prices, with these gaps often expected to be filled. Following a significant increase in price last week, Bitcoin left a notable price discrepancy and filled the gap in CME futures, potentially signaling another surge in the market. However, this also led to a massive wave of liquidations, resulting in $1 billion worth of positions being liquidated.

Trump’s cryptocurrency reserve announcement and the rise of Bitcoin
The recent rise in the price of Bitcoin gained momentum with US President Donald Trump’s strategic cryptocurrency reserve announcement. Trump’s announcement on Sunday evening outlined a reserve plan covering major cryptocurrencies like Bitcoin, Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA). This announcement increased excitement among institutional investors, leading Bitcoin’s price to reach $92,000. Yet, following this surge, a significant gap emerged in the CME Bitcoin futures chart. Bitcoin closed at $84,500 on Friday and rose to $95,300 on Monday, leaving a major $10,800 gap. This gap was entirely filled on Tuesday afternoon in Asia as Bitcoin dropped to $83,500. By Wednesday at 9 am Turkish time, BTC was at $87,000.

CME gaps and historical trends
CME gaps are known as price differences that occur due to 24-hour trading in spot markets while the exchange is closed on weekends. Historically, these gaps have acted as magnets for Bitcoin prices. Data shows that CME futures’ gaps are often filled eventually, serving as a signal for a correction after sharp price movements. Tuesday’s gap-filling movement was recorded as an example of Bitcoin returning to equilibrium after an explosive surge.

Liquidations and high liquidations
Recent price movements in Bitcoin resulted in a significant wave of liquidations. Approximately $900 million worth of long bets on CME futures were liquidated, with the total loss exceeding $1.5 billion over three days. Tuesday’s price decline led to about $400 million worth of bets being liquidated, especially following the retracement of Bitcoin prices after Monday’s surge. These liquidations mostly occurred during late hours in the US and early hours in Asia.

Liquidations involve the forced closure of leveraged positions due to investors losing their initial margin. If an investor cannot meet the margin requirements of a leveraged position, meaning they lack sufficient funds, the position becomes liquidated. High liquidations are often seen as a sign that overbought assets may be ready to reverse or take profits. This creates a critical data point for investors following market movements.

Previous gaps in CME futures and bear market dynamics
However, the gap filling and significant liquidations may not be a cause for celebration among market participants. In particular, a gap below $80,000 in CME futures from three months ago is currently being closely monitored. Following the US presidential elections in November, a gap above $81,000 in CME futures occurred after prices opened at $77,930 and is now back in focus.

While Bitcoin performed a significant rally up to $92,000, CME futures and market liquidations may indicate a correction phase at present. This correction process may lead to a rebalancing of Bitcoin prices and potentially pave the way for another surge. The market is highly sensitive to such movements, and critical levels have emerged that investors need to carefully monitor.