Bitcoin plunges nearly $300 in 3 minutes, likely due to an upward "gap"

Bitcoin fell below $10,000 this afternoon at 2 p.m., the sudden volatility causing Bitcoin to break the $10,000 mark just a day after reaching it.

• The lowest point reached $9,756
• Price dropped to fill the gap in CME futures

According to data from Binance exchange, Bitcoin momentarily dropped to a low of $9,756 at 2 pm, although it later rebounded above the $10,000 mark, and is currently consolidating around $9,800.

As reported, today's sharp drop is due to filling the gap in the CME Bitcoin futures market.

Specifically, the CME Bitcoin futures closed around $9,850 last Friday, and the weekend's rise in Bitcoin caused a "gap" in the futures market at the opening of the new week, which coincided with the price after today's Bitcoin drop, as shown in the figure below:

Trading analyst filbfilb pointed out:

Although breaking the $10,000 support, the drop was not significant. The weekend price breakthrough and the CME futures gap filling increased the possibility of retracement, overall this is still a fairly healthy pullback.

Filbfilb concluded: What needs to be watched now is whether we can quickly return to $10,000, or if we need to test lower support levels.

Additionally, according to data from the trading monitoring platform WhaleTrades, when the price dropped to $9,900, a buyer on the derivative exchange BitMEX bought over $2 million worth of Bitcoin in a single transaction.

Nevertheless, overall trading sentiment still seems quite active, as in Sunday's trading on CME, Bitcoin futures prices hit a yearly high of $10,350, the highest level since mid-September 2019.

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