What is CME GAP?

Here’s simple and short explanation.

A CME gap refers to a price gap on Bitcoin futures traded on the Chicago Mercantile Exchange (CME). These gaps are often noted by traders because they may indicate potential areas where the price could return in the future.

Here’s how it works:

• CME Bitcoin futures only trade Monday to Friday, and do not trade on weekends.

• However, Bitcoin trades 24/7 on crypto exchanges like Binance or Coinbase.

• If Bitcoin’s price moves significantly over the weekend, the CME futures chart will show a “gap” when it reopens on Sunday evening (U.S. time).

Example:

• CME closes Friday with Bitcoin at $104000

• Over the weekend, Bitcoin pumps to $106000.

• When CME opens again Sunday night, there’s a $2,000 gap on the CME chart between $104K and $106K.

Why it matters:

• Traders often believe “CME gaps get filled”, meaning Bitcoin might return to the price range of the gap.

• This belief is based on historical patterns, though it’s not guaranteed.

In summary:

A CME gap is the difference in price on the CME Bitcoin futures chart between Friday’s close and Sunday’s open due to the CME being closed over the weekend while Bitcoin continues to trade elsewhere. It’s used by some traders as a technical indicator.