Should Gap Be Concerned About Bitcoin Futures?

When Bitcoin (bitcoin) back to $30,000, traders will have to look for clues in the market structure and find that the CME futures market has a gap to fill from early March.

Thursday’s 3.7% gain to $29,900 stalled just before that psychological hurdle – an area that has proven difficult to break for the past two and a half weeks. At present, the trading price of Bitcoin on the day is relatively stable, falling to around 29,200 US dollars.

With speculation growing on the asset’s direction, some traders are starting to question whether the “gap” in CME futures — near $20,000 — could be filled sometime this year.

The large gap between $20,300 and $21,100 has led some to speculate that the price will retest around these levels.

A CME gap is the price difference that occurs between the CME Bitcoin futures contract chart’s closing price for one trading day and the opening price for the next trading day.

The gap occurs because the Bitcoin spot market is traded 24/7 on various centralized exchanges from which the CME derives its reference price, while the futures market is only traded from Monday morning 06:00 to Friday 5:00 pm (Vietnam time) .

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CME Bitcoin futures, daily timeframe. Source: TradingView

The importance of the CME gap for Bitcoin is painting theme A debate between traders and analysts.

Some see gaps on CME charts as important support or resistance levels, since prices tend to fill gaps at some future date. Meanwhile, others argue that the CME gap is just a technical phenomenon with no real predictive value.

However, their relatively infrequent presence on daily charts provides more confidence to traders looking to identify trends.

The last notable CME gap in Bitcoin was between $20,000 and $20,700 on Jan. 13. The gap was later filled on March 10th— bankruptcy day Silicon Valley Bank – when the price fell to $19,520.

Last year, when prices started dropping from $30,000 to $17,000 in June, the relatively large $1,400 gap formed on June 10, and more recently, between $28,700 and $27,300. It was filled earlier in the month as the price moved higher.

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