Cardano Jumps 20% as Analyst Eyes Bitcoin Pullback to $40K to ‘Fill CME Gap’

Native
tokens
tied
to
layer
1
(L1)
blockchains
gained
the
most
Friday,
with
Cardano

(ADA)
being
the
best
performer,
as
steady
bitcoin

(BTC)
price
fueled
capital
rotation
to
altcoins.

Bitcoin
bounced
between
$43,000
and
$44,000
during
the
day,
quickly

shaking
off
a
minor
dip
following
a
stronger
U.S.
employment
report
than
analysts
expected
that
dampened
interest
rate
cut
expectations
for
next
year.

The
top
crypto
was
recently
trading
at
around
$43,800,
consolidating
as
investors
digested
its
swift
rally
to
near
$45,000
this
week
after
its
breakout
from
$38,000
a
week
ago.

Altcoins,
meanwhile,
jumped
across
the
board,
resembling

early
November’s
“altcoin
rotation”
when
slowing
bitcoin
momentum
drove
traders
to
realize
some
gains
and
invest
in
smaller,
riskier
cryptocurrencies.
These
capital
rotations
are
typical
in
the
crypto
markets
after
large
bitcoin
run-ups,
followed
by
a
rally
in
bigger
crypto
assets
then
among
meme
coins
and
micro
caps
as
traders
chase
tokens
that
haven’t
moved
yet
to
profit.

ADA
surged
25%
to
57
cents
at
one
point
during
the
day,
its
highest
price
since
August
2022.
It
gave
up
some
of
the
early
gains
later
in
the
day,
but
was
still
up
almost
20%
today.
Other
notable
top
performers
were
native
tokens
of
Polkadot

(DOT),
Algorand

(ALGO),
Avalanche

(AVAX)
and
Solana

(SOL),
which
posted
7%-11%
gains.

The
CoinDesk
Market
Index

(CMI),
a
basket
of
almost
200
cryptocurrencies,
was
up
1.5%
through
the
day,
more
than
BTC,
underscoring
altcoin
outperformance.

As
bitcoin’s
momentum
stalled,
some
analysts
speculated
about
a
potential
pullback
to
retest
lower
price
levels.

Bitcoin-focused
analyst
Willy
Woo
eyed
a
price
level
between
$39,000-$41,000
based
on
a
price
gap
in
the
Chicago
Mercantile
Exchange
(CME)
bitcoin
futures
market,
which
BTC
might
“fill”
sometime
in
the
future.

These
price
gaps
occur
because
the

CME
futures
market,
unlike
native
crypto
exchanges
like
Binance
or
Deribit,
don’t
trade
around
the
clock,
and
there
could
be
a
difference
between
closing
and
opening
prices
depending
on
bitcoin’s
price
action
when
the
market
is
closed.
Some
analysts
reckon
that
asset
prices
tend
to
revisit
these
levels
during
a
correction,
filling
the
gap.

BTC
rallied
last
weekend
surpassing
$40,000,
when
the
CME
futures
market
was
closed,
creating
the
price
gap
on
the
chart.

“By
my
count
28
out
of
30
gaps
have
been
filled
on
CME
daily
candles
(93%),”
Woo

posted
on
X,
formerly
Twitter.

However,
these
gaps
do
not
always
get
filled.
For
example,
BTC
hasn’t
revisited
the
CME
gap
at
around
$20,000
yet,
formed
in
March
during
the
weekend
collapse
of
Silicon
Valley
Bank
(SVB).

Despite
a
potential
short-term
pullback,
bitcoin’s
outlook
is
bullish,
with
growing
interest
among
institutional
investors,
Hany
Rashwan,
co-founder
and
CEO
of
digital
asset
management
firm

21.co,
said
in
a
Friday
interview
with
CoinDesk
TV.

Rashwan
opined
that
market
observers
are
“underappreciating”
future
inflows
into
BTC
if
–
or
once
–
a
spot-based
exchange-traded
fund
gets
approved
in
the
U.S,
which
will
likely
happen
according
to
analysts.

“There
are
a
lot
of
prospective
buyers,
who
for
various
reasons
wanted
to
invest
in
crypto
but
has
been
prohibited
to
do
so”
because
of
regulations,
he
said.
Rashwan
noted
that
75%
of

inflows
into
digital
asset
funds
during
the
year
happened
in
the
past
60-90
days.
“That’s
not
normal,”
he
said,
adding
that
it’s
“a
sign
of
change
in
sentiment
across
primarily
institutional
players.”

Read
more:



Crypto
Funds
Attract
Largest
Weekly
Inflow
in
2023
as
Bitcoin
‘Short-Sellers
Capitulate’

Rashwan
prognosed
all-time
high
prices
for
bitcoin,
but
not
in
the
short
term.

“I
think
we
will
beat
the
bitcoin
all-time
highs
sometime
in
the
next
12-18
months,”
he
said.
“We
are
not
fully
out
of
the
woods
yet.”