What are Bitcoin CME gaps?

Bitcoin CME gaps refer to discrepancies in price between the closing price on a particular trading day and the opening price on the subsequent trading day on the Chicago Mercantile Exchange (CME), which is among the world's largest and most diverse financial exchanges. The CME functions as a marketplace for various financial derivatives, commodities, and other investment instruments.

The occurrence of Bitcoin CME gaps is rooted in the fact that the cryptocurrency market remains open during weekends, while traditional markets like the CME are closed. Consequently, variations exist between the closing price on Friday and the opening price on Monday.

On Bitcoin charts, identifying CME gaps involves comparing the price levels where the Friday close and Monday open differ. Traders frequently take note of these gaps, as they may later act as significant support or resistance levels. So, are there various types of Bitcoin CME gaps to explore?

Indeed, there are three primary types of CME gaps: common, breakaway, and exhaustion. Common gaps are swiftly filled and are characteristic of routine market movements. When a gap is filled, it indicates that the price has returned to the level where the gap originally occurred. Breakaway gaps signify the commencement of a strong trend and manifest during major price fluctuations. Conversely, exhaustion gaps suggest the conclusion of a trend and a potential reversal.

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