Bitcoin has been consolidating for a couple weeks now, will the breakout be to the upside or to the downside?

After facing stiff resistance near the previous all time highs around $20k, bitcoin has basically been going sideways for several weeks now.

Outside from one large drop that came on the heels of the CEO of Coinbase saying that the government is likely to come down on self custodying bitcoin wallets in the near future, the price action has been fairly subdued.

As you can see, it has been consolidating quite nicely under $20k, specifically ranging between roughly $19.5k and $18.5k:

(Source: https://www.tradingview.com/x/fKplsppU/)

One thing to point out though is that the highs do seem to be getting lower within this range while the lows are basically staying the same.

Some chartists might say this type of pattern makes a break to the downside more likely.

And then there's the CME gap...

During that big drop I mentioned above, the CME markets were open.

However, over the holiday, bitcoin rebounded strongly while the CME markets were closed, leaving a massive gap on the bitcoin CME chart.

In fact, it's one of the bigger gaps I have ever seen on the CME bitcoin charts to be honest.

Check it out:

(Source: https://www.tradingview.com/x/SWi8Jt5p/)

These gaps have a tendency of filling and this one would need to fall all the way to about $17k in order to fill that gap.

What do you think, does bitcoin fill that gap or no?

I don't have a strong feeling either way.

There is a ton of demand for bitcoin right now and it's having trouble dipping much at all, apart from an unexpected news event I am having trouble seeing how it's going to fall all the way to $17k...

That being said, it's hard to argue with the 90%+ fill rate of these bitcoin CME gaps...

What say you?

Stay informed my friends.

-Doc