I saw someone asking whether Bitcoin will fill the CME gap of 78-81, so let's discuss this situation and how to respond;
First, will this gap be filled? In terms of the time cycle, since the current time distance from this gap is not long, combined with historical experiences of gap filling, there is definitely a possibility of filling the gap;
Secondly, if this gap is to be filled, when will it be filled? Recently, the leveraged market has gone through two rounds of historic long liquidations, which are a single-day liquidation of 1.5 billion and a cumulative three-day liquidation of 2.1 billion. From this perspective, the possibility of filling this gap in the short term is relatively low;
Next, as the market is about to enter a recovery period, Bitcoin needs to confirm a range of fluctuations. A reasonable range that allows ample speculation of both long and short funds should be at least 10,000 points, which is a 10% fluctuation. Considering false breakdowns or false breakouts, the fluctuation may reach 15%. So what would be an appropriate range?
88-102 is one possible range, and 78-93 is another possible range. If we are moving in the 88-102 range, then that aligns with the current stage's rhythm. If it breaks below 90, and it cannot recover for a long time, then it may go to fill the CME gap at 78, and further repair in the 78-93 range. This would be devastating for the bulls;
Finally: How should we respond? If it is the 88-102 range, this is in line with expectations, and we will feel relatively comfortable, essentially eliminating trial and error. However, if we directly go to fill the gap at 78 and move in the 78-93 range, then we will have a trial and error opportunity. But if the funds you use for contracts are only a small portion of your total, when it really reaches 78, you can directly continue to increase your investment, and you will quickly earn back the capital lost in the previous trial and error;
Shared from Twitter by Zhao Zilong