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Author: Admin | 2025-04-28
The right shows the price action over that weekend, creating a gap due to the variation in the open and the closing candle. Because the price moved strongly during that weekend, the CME chart (on the left) has a higher open candle than its close candle formed on Friday, resulting in what we call a CME gapThese CME gaps have a tendency to get "filled” – meaning that the market corrects back into the gap. While sources struggle to agree on the exact percentage, most of them agree that at least 65% of CME gaps are filled eventually. In the example above, this would mean a correction back to $20,000, which has not happened so far – resulting in a gap that might get closed (DYOR).Most of the time though, the cryptocurrency market tends to be stable during the weekends while the CME markets are closed, preventing any such gaps from occurring. This is also true in the below example, where the price of Bitcoin in relation to USD barely moved an inch during CME’s closing hours. In fact, a strong move got paused during those hours, only to resume as soon as the CME reopened.Essentially, the CME close price acts as a magnet, keeping prices in place until the CME markets reopen again. Even if the price manages to escape the magnet, the market ends up finding its way back to that same level – as shown in the chart below.Knowing the high likelihood of the CME gaps being filled eventually, some crypto traders like to open positions when the price gets away from the CME closing price. For example, when BTC started to show signs of bottoming in the above example, traders could open a long position, targeting the CME closing price at the black line.This strategy tends to work well in sideways markets but loses its edge when the markets enter a trend. With a trending market, CME traders tend to miss out and unfilled CME gaps become more common.As with other trading systems, entering trades based on the CME gap should always be done in conjunction with other forms of analysis, as trades based purely on a gap are unlikely to yield positive returns. For example, when an RSI divergence forms, one could enter a trade targeting the CME gap fill.Other traders use this statistic as a reason to take the weekends off, as prices have a high likelihood to stay relatively flat over the weekend.All things considered, the crypto markets have been behaving differently since the launch of CME Bitcoin futures contracts. Weekend moves have become less common, and when they do happen, the likelihood of a retrace is higher than it used to be.In
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