Bitcoin Price Pauses, CME Gap and Economic Cycles Could Shape Next Big Move

Bitcoin started the weekend by slowly trading sideways around the CME close level. According to market observers, such as Daan Crypto Trades, for now, no clear direction presents itself in the middle of the range, and there is a balance between buyers and sellers.

Having experienced a sharp drop earlier in the week, BTC steadied and stayed within a tight consolidation zone, as demonstrated by the green box on charts tracking CME close and open levels.

Source: X

While this is a consolidation, volume has dropped from the prior move to suggest that traders aren’t strongly pushing the price in either direction. Sideways price action on lower volume is most often a pause or minor correction, not a strong bull breakout.

Another important factor is the CME gap between the last close and the next open. BTC has a history of often filling these gaps, so the area beneath current price might be attractive for a pullback if momentum weakens. The traders are keenly observing this because the gap usually pulls the price action toward itself in the near future.

Macro Cycles Point Toward Long-Term Upside For Bitcoin

Beyond short-term price actions, Bitcoin has tended to follow bigger economic cycles. Historical analysis indicates that Bitcoin’s large rallies often coincide with recoveries in the economy as represented by the ISM Purchasing Managers’ Index.

While PMI rises back above the shrinking-to-expanding threshold, it has coincided with the beginnings of Bitcoin’s strongest rallies, such as in 2013, 2017, and 2020–2021.

Source: X

For now, the PMI is near 50, indicating the stabilization of the economy after a slowdown. This corresponds with what we notice prior to ups and downs in the past and indicates that a wider economic recovery might be just what Bitcoin needs to start its big rise next.

According to analysts, liquidity is the keyword: significant and sustained gains usually require money to make its way back into risk assets. Until that money actually makes its way back, short-term price gains might remain small.

Also Read: Bitcoin Daily Candle Shows Indecision with $93,000 Target in Sight