What is the Bitcoin CME gap? Find out here – CryptoNewsTo

What is the Bitcoin CME gap? Find out here

Trading Bitcoin can follow many strategies. Do you use Fundamental Analysis or Technical Analysis? Are you a day trader, swing trader, scalper, or HODLer? No matter which type of trader you are, it is always good to “mind the gap”. So then, what exactly is the Bitcoin CME gap?

exchange comparison

The Bitcoin CME gap: What it is and how to use it

So what is the Bitcoin CME gap? Let’s have a look at what Bitcoin and the CME are, to begin with.

Bitcoin Wallstreet

What is Bitcoin crypto?

Bitcoin is the most recognized digital and decentralized cryptocurrency. It is created through solving cryptographic tasks. Transactions are written into a decentral blockchain, which ensures that Bitcoin is always available and immune to manipulation. The revolutionary aspect of Bitcoin is that it does not need a central authority like a bank for the validation of transactions. The current price of Bitcoin in USD/EUR/YEN (Fiat) is created through supply and demand.

After the creation of Bitcoin, many other cryptocurrencies started to pop every now and then. Despite that, Bitcoin remains the biggest cryptocurrency by market capitalization. it currently has a market dominance of 41.6%.


What are Bitcoin CME futures?

The CME, or Chicago Mercantile Exchange, is the world’s largest derivatives trading exchange. The CME traditionally offers futures or options on futures on any asset imaginable, from agricultural products, to forex, energy, commodities, and stock indexes.

A future is a legal agreement to buy or sell a well-defined quantity of something at a determined price at a determined day in the future. For example, buying 20 BTC at $19,500 on 1/2/2021. At the height of the 2017 Bitcoin bull run, on October 31st, the CME added Bitcoin to its portfolio of tradeable asset classes:

Shortly after, Bitcoin crashed from its all-time high. Nevertheless, CME Bitcoin futures kept increasing in popularity. The exchange settled an all-time high of 268.18K Bitcoins during May 2019 when Bitcoin ended its winter, moving from $5,250 up to $9,125.

What is the Bitcoin CME gap?

The Bitcoin CME gap, also called the “CME gap” for short, is the difference between the trading price of Bitcoin futures contracts when the market opens on Sunday, and when it closes on Friday. Unlike cryptocurrencies, traditional assets do not trade 24/7 around the clock. Most traditional exchanges follow normal working hours and close on holidays, and the CME is no exception to this!

While you can trade on Binance for example at any given time, the CME Bitcoin futures trading opens from Sunday evening until Friday evening (Central Time). From Friday to Sunday, the Bitcoin CME futures price is “fixed”, while Bitcoin’s price continues to move up (or down) on cryptocurrency spot exchanges. When the CME futures re-open, futures contracts catch up with spot prices, creating a gap!

BTC/USD CME Futures gap from TradingView
BTC/USD CME Futures gap example – TradingView

Example: In this case, the Bitcoin futures closed at $16,925 on Friday, Nov 27th. During the weekend, Bitcoin’s price increased on spot exchanges. When the CME re-opened on Sunday, Nov 29th, the price opened at $18,430 creating a gap of $1,505 or +8.9%.

How does the Bitcoin CME gap affect the price of Bitcoin?

Bitcoin CME gaps have often been known to “fill”. Filling means that the spot price moves back to the previous close. In our example above Bitcoin would need to fall back to $16,925 to close the gap. Gaps can also close upwards. If for example Bitcoin closes on a Friday at $19,000 and re-opens on Sunday at $16,000, many traders would expect the price to go back up to $19,000 to “fill the gap”.

Top platforms that could help streamline margin trading in 2022

Keep in mind that trading is probabilistic, not deterministic in nature. This means that chart patterns and indicators can show you what is most likely to happen, but they cannot tell you what will precisely happen. The Bitcoin CME gap should be considered as one such indicator!

The CME gap doesn’t necessarily have to fill, it is just more likely to fill than not. Filling the gap can take hours, days, or even weeks. Other indicators must be taken into consideration as well when deciding on your next trade.

You can purchase bitcoin on the  Binance ,  Coinbase , and  Bitfinex crypto exchanges.

Recommended posts

You might also like

More from Bitcoin

Top 3 reasons why Bitcoin will continue to RISE in the coming weeks!

Will Bitcoin continue to rise in the coming weeks? In this article, we go over the top 3 reasons why …

Bitcoin price crosses $20,000 for the first time in 2023! Is $30,000 next?

What’s next for Bitcoin now? Will Bitcoin reach $30,000 soon? Let’s analyze in this Bitcoin price prediction article.

Bitcoin Price Prediction for 2023: Prepare for THIS MOVE!

2023 is finally here! Will Bitcoin go up in 2023? Or will we witness yet another crash? Let’s analyze in …

Source link

36 thoughts on “What is the Bitcoin CME gap? Find out here

  1. You’re so awesome! I don’t believe I have read a single thing like that before. So great to find someone with some original thoughts on this topic. Really.. thank you for starting this up. This website is something that is needed on the internet, someone with a little originality!

  2. naturally like your web site however you need to take a look at the spelling on several of your posts. A number of them are rife with spelling problems and I find it very bothersome to tell the truth on the other hand I will surely come again again.

  3. I’m often to blogging and i really appreciate your content. The article has actually peaks my interest. I’m going to bookmark your web site and maintain checking for brand spanking new information.

  4. Забота о домашнем пространстве – это забота о благополучии. Утепление наружных стен – это не только стильный внешний вид, но и обеспечение тепла в вашем уютном уголке. Специалисты, команда профессионалов, предлагаем вам превратить ваш дом в идеальное место для жизни.
    Наши проекты – это не просто теплоизоляция, это художественная работа с каждым элементом. Мы добиваемся гармонии между формой и содержанием, чтобы ваше жилище превратилось не только уютным, но и очаровательным.
    И самое существенное – доступные тарифы! Мы верим, что профессиональные услуги не должны быть неподъемными по цене. Стоимость утепления дома снаружи цена за 1м2 начинается всего от 1250 руб/кв. метр.
    Использование современных технологий и высококачественных материалов позволяют нам создавать утепление, которое долговечно и надежно. Оставьте в прошлом холодные стены и лишние затраты на отопление – наше утепление станет вашим надежным экраном от холода.
    Подробнее на ppu-prof.ru/
    Не откладывайте на потом заботу о радости жизни в вашем жилье. Обращайтесь к специалистам, и ваш уголок станет настоящим творческим шедевром, которое подарит вам не только тепло. Вместе мы создадим дом, в котором вам будет по-настоящему комфортно!

Comments are closed.