Bitcoin Sees Second-Largest CME Futures Gap After Weak January Close

• BTC slipped intensely from the initiation of the $80,000s to $78,621, showing one of the weakest January performances in over 10 years. 
• The Kobeissi Letter revealed that the late-January fall was influenced primarily by shrinking liquidity and heavy liquidations instead of macroeconomic news.

Bitcoin-associated derivatives entered into this new trading week having a sharp price gap after CME futures opened again at around $6,800 lower, indicating increased pressure after January’s weak close. 

CME Bitcoin futures in January closed at around $84,560 and opened in the new trading week of the new month at $77,730, making the second-largest gap on record. Spot BTC was hovering in the $77,000 range, and BTC’s monthly close was near $78,600, after witnessing a 10% fall in January. 

Trading activity boosted following the volatility increase. Futures markets witnessed a surge in income at the time when leverage was reduced after last week’s liquidations, advising a more defensive stance. 

A Sharp Decline

CME Bitcoin futures are regulated contracts primarily leveraged by institutional investors, hedge funds and professional traders. As the exchange shuts on the weekend, prices can deviate from the spot market, trading around the clock. 

When futures open again, large gaps can reappear if Bitcoin has shown sharp movement. The gaps often leave their impact on short-term trading behaviour. A lot of traders observe keenly to witness whether the price movement is back toward the previous close, a pattern that can influence extra volatility in the days that follow. 

Bitcoin set its foot into this month firmly, initiating with an $80,000 range and going up to around $90,000 in the first 15 days of the month. After which, the momentum slowed down gradually, and the price started trading in a wide range after the sellers got control. 

In the last week, the pressure accelerated more. BTC slipped intensely from the initiation of the $80,000s to $78,621, showing one of the weakest January performances in over 10 years. 

The analysis by The Kobeissi Letter revealed that the late-January fall was influenced primarily by shrinking liquidity and heavy liquidations instead of macroeconomic news. 

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