What is the CME Gap and is it important?

What is the CME Gap and is it important?

By Skyfries | Skyfries Report | 22 Nov 2020


***This article is not financial advice.  Always consult with a qualified financial advisor before making decisions with your money***

If you are around cryptocurrency social media you have probably come across people talking about the CME gap as an indicator in Bitcoin prices. 

CME (Chicago Mercantile Exchange) is the leading Bitcoin Futures and Derivatives market for institutional and professional investors.  CME's futures market is used as a tool mainly for price discovery the gap between the current price of Bitcoin and the futures price (not the BRR) listed on CME.  For the typical investor a CME gap of under $1000 is not something to really be worried about due to the volatility within BTC and the market delays between CME's open market hours for exchange rates (CME Globex: 5:00 p.m. – 4:00 p.m. Central Time Sunday – Friday) with delays of 10 minutes for non-real view customers.  You can see these on the following exchanges with the following tickers:

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For investors without access to these platforms you can also view the CME on a delayed basis for free on Trading View using the ticker BTC1!

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Which begs the question is understanding short term price discovery important for a long term trader?  I'm of the opinion it is not important until you are thinking of selling.  Right now in the post-halvening market smart money is holding and paying less attention to price discovery indicators like the CME gap.  A CME gap of 5k could be used as a buy/sell point to take advantage of the volatility and increase your satoshi horde, but for the less savvy among us a better way to wait out the post-halvening pump would be to earn 5-9.3% interest on their crypto on the BlockFi platform to stack sats (and other cryptos) with less risk than playing the volatility game.

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Skyfries
Skyfries

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