During the U.S. overnight, May Bitcoin futures (BTC) posted a massive selloff before bouncing from weekly lows. The price action resembled a flash crash, with May BTC falling from $7630 to $6320 in a little over 15 minutes. In the process, the GAP up to open the trading week was filled in before price rallied above the $7000 level.
May Bitcoin Futures Fill In The GAP
As a general rule, any GAP in pricing is eventually filled in. This concept is deeply rooted in the process of price discovery itself ― neglected price points typically end up being contested. For May BTC futures, this was certainly the case today.
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No major reasons for the sudden plunge in BTC are being cited at the moment. For now, most in the cryptosphere are chalking it up as a huge number of stop loss orders being run, prompting a market panic. In other words, just another case of “Bitcoin being Bitcoin.”
Overview: Judging by the technical outlook, my bias remains bullish for BTC. Prices have bounced above the key 38% Retracement Level ($7102) and remain above downside support.
In a Live Market Update from yesterday, I outlined a long trading plan for Bitcoin. It looks like the play weathered the storm on the cash markets. For now, staying the course in anticipation of a return to $8000 is the play.
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