The CME Mother of All Gaps
How Will We Close It? The road to 1 million? Or 10 month top?
A weird Bitcoin claim is circulating that the 1,000 mark was crossed on November 28, 2013, and the 10,000 was crossed on November 28, 2017.
Well, not exactly but very close.
Before Bitcoin exchange futures and spot markets had trading hours. The nature of Bitcoin proof of work demands 24/7 markets. As a result, the legacy exchange of CME is a beast of its own doing as it trades 5 days a week rather than 24/7. This can have a marked effect for Techinical Analysis especially in determining moving averages.
The CME generally trades at a premium to the world market, so it alone crossed the magic 100,000 last month. Nevertheless, it did it. And there was no CME in 2013 or 2017.
Break Away Gap to One Million Dollar Bitcoin Or Major Top?
So here we are at the end of November 2024 crossing $100,000. Not only that but we have a breakaway gap from a 3-year cup and a 6-month handle.
So is this the breakout for the long-predicted and anticipated 1 million dollar bitcoin?
Now as a professional trader, I anticipate this Mother of All Gaps will be filled. But how?
I have no clue! And neither does anyone else. But I can outline two extreme scenarios.
The best-case bullish scenario is that this breakaway gap will be filled after Bitcoin explodes to $800,000 and then has its usual 90.6% correction, taking it back to $76,800, filling the Mother of All Gaps at $77,930.
The following highlighted paragraphs are due to the good historical eye of @FarmerBTC. Due to his work this article was updated on December 3, 2024.He deserves a following on X and I encourage him to also begin writing.
This bullish view is supported by CME history. On December 24, 2020, the CME had a high of 23,795, closed for the Christmas holiday, and gapped to a low of 26,535 on December 28, 2020.
Bitcoin went 3x to over 60,000 and did not fill the gap until June 13, 2022.
A similar 3x rally takes Bitcoin to over 300,000 before filling the CME Mother of All Gaps.
The best-case bearish scenario is we close the gap before the end of the year and trade below it for 10 months much like the Dow Jones Industrial Average flirted with 1,000 for years for 17 years. Yes, 10 months in Bitcoin is the equivalent of 17 years in the stock market.
Now I realize what I am about to say is Bitcoin Heresy for Bitcoin Maximalists who allow Vitalik Buterin to define who they are. But Bitcoin is not money, just as gold is not money.
Bitcoin and gold can be used as money. But gold was rarely used as money even under the classical gold standard that emerged organically to bring the Gilded Age, just as Bitcoin is rarely used as money today.
One of the rare exceptions where gold was widely used for money is the California Gold Rush because, in this unique time and place, gold was the most tradable good.
Rather gold substitutes in the form of banknotes emerged as money. Gold was not money but non-inflationary self-liquidating commercial paper (banknotes) issued by banks redeemable in gold at the bank, and tradable for other goods offered in the market, were money because these banknotes were the most tradable goods.
Yes, banknotes were goods produced by banks to purchase other goods, including gold, in the marketplace. Gold was simply the yardstick or measuring unit and redeemability required banks to have gold reserves which acted as a governor to keep money and banking sound. Gold reserves were determined by the market rather than decreed by government regulation.
As Ááron Sepúlveda-Cué teaches, “Money is the most tradable good, not the most valuable good.”
It was not gold that emerged as money, but species based on the gold standard that emerged organically as money.
To further my heresy I have long maintained that Bitcoin sucks as cash and is a lousy store of value.
Bitcoin remains a worthy speculation.
Like gold, Bitcoin will never emerge as money, but species based on The Bitcoin Standard will emerge organically as money.
UGLY OLD GOAT
