If you are trading in crypto for a long time then you might have heard about the term CME Gaps on the Bitcoin chart, or in another context, if not then don't worry, we will have a short introduction to the topic down below, and along with that, we will also see the recently formed CME Gap on Bitcoin chart and how you can use CME Gaps for trading, and analyze the profitability of the CME Gaps. So, let's dive in...
What are CME Gaps?
CME stands for Chicago Mercantile Exchange and is one of the largest derivatives exchange in the world. It is so big that its trading activity can influence the entire market. And CME being a traditional exchange is open for a limited time and is not available 24*7 like other crypto exchanges like Binance and Coinbase. And due to this, when CME closes at a specific price while other crypto exchanges trade Bitcoin, there can be differences at the time when CME reopens, so there forms is a gap between closing price and opening price of Bitcoin on CME, this is known as CME Gaps.
Let's understand it with the example, CME closes on the weekend with Bitcoin's price of $10,000, and then on Monday when CME reopens, Bitcoin's price will be $10,500. So the difference between the closing price of Bitcoin and the opening price is $500, this price gap is known as CME Gap. This gap is formed because even though trading on CME is stopped for a weekend but Bitcoin is tradable on other crypto exchanges which offer 24*7 trading.
CME Gaps and Trading!
I hope you got a basic understanding of what CME gaps are, now let's move to the next part and see how we can use it in trading and current open CME gaps for Bitcoin.
If you follow the CME Gaps then you might have known that it is one of the most accurate trading instruments. It is seen that around 90% of the CME Gaps get filled in more or less time. But the important thing to consider is, sometimes it may take a few hours to close the gap or it may take months as well! So if you are thinking about implementing CME Gaps into your trading strategy then make sure you are using the amount which you can hold for a long time or at least you are using proper risk management to get out of trades if things go against you and you don't want to commit amount to that trade.
Recently, there is a newly formed CME gap of around $30,170, which means to fill the gap Bitcoin has to come down nearly $30,170. At the time of writing this article, the price of Bitcoin is ~$30,390, and looking at the market conditions this gap might get filled in no time, btw you can comment if the gap is filled or still open at the time of reading this article, to make it more simple I am adding the Bitcoin price ticker above.
Unfilled CME Gaps
As I have already told you guys above, sometimes it may take longer time to fill the CME Gaps, maybe months. Following is the list of such unfilled CME Gaps.
Above is the list of unfilled CME Gaps, which might take some time to get filled or might not!!
[Note: The purpose of this article is to share information and should not be taken as any type of trading or investment advice. Trade and invest responsibly based on your own research]
Hope you guys find this short article informative! If yes, then do follow me and share your views on the current crypto market in the comment section.
Thanks for Your Time!
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