Bitcoin dropped sharply from $114,700 to $110,600.
"Filling the lower gap of CME": CME Group is a futures market where Bitcoin is traded. Sometimes, when the market closes on Friday and opens on Sunday night, the price of Bitcoin in the futures market is different from the price at closure. This creates a "gap". When the price of Bitcoin drops (or rises) and fills that gap, it is considered that the market has adjusted that difference. In this case, the drop was to "fill" a gap that had remained below the current price.
* "Liquidity zone": This refers to a price level where there are many buy or sell orders. By dropping to this zone, Bitcoin finds the interest of buyers who were waiting to enter, which often causes a bounce or stabilization of the price. However, despite the drop in Bitcoin, the text indicates that altcoins (all cryptocurrencies except Bitcoin) did not suffer such a strong drop. This may suggest that the altcoin market has its own strength or that investors are not as concerned about Bitcoin's short-term fluctuations.
Key levels for Bitcoin
These are important benchmarks for traders:
* $112,600 - $113,000: If the price of Bitcoin closes the day above this range, it is a positive sign that could indicate that the price has the strength to rise to $120,000.
* $112,000: If the price of Bitcoin closes the day below this level, it is a sign of weakness that could indicate a possible drop to $105,000.
The state of Ethereum (ETH)
* Bounce: Ethereum (ETH) reached a new all-time high (ATH) of $4,950 and then retraced, bouncing between $4,700 and $4,750.
* "Liquidating long positions": Long positions are bets that the price of an asset will rise. When the price falls, these positions can be liquidated (forced to close by the exchange), which generates additional selling pressure. The text suggests that "market makers" (large market players) could be causing this drop to liquidate those who bought with leverage before pushing the price above $5,000.
Recommended investment strategies
* Avoid leverage: Leverage is using borrowed money to trade. It is very risky, especially in volatile markets. The recommendation is to maintain spot positions, that is, to buy and hold the cryptocurrency directly without using debt.
* Accumulate altcoins: Suggests buying 10% of the capital in altcoins that are considered strong.
* DCA (Dollar-Cost Averaging): Means investing a fixed amount of money at regular intervals, regardless of whether the price goes up or down. If the market drops, it is recommended to stick with this strategy to average the purchase price down.
The market is very volatile, but after large rises (or falls), recovery can be quick. Therefore, it is important to pay attention to key price levels and adjust the investment strategy.