A CME Gap occurs when the opening price of Bitcoin futures on the Chicago Mercantile Exchange differs from its closing price on the previous trading day. This price discrepancy arises because the CME futures market closes on weekends, while spot Bitcoin markets trade continuously. Traders often view these gaps as potential price targets, anticipating that the market may eventually return to fill them. It represents a specific technical analysis phenomenon observed in regulated Bitcoin derivatives.
Context
The concept of CME Gaps frequently appears in cryptocurrency technical analysis discussions, influencing short-term trading strategies for Bitcoin. Market participants often debate the predictive power and reliability of these gaps in forecasting future price movements. Observing CME Gaps provides insights into institutional trading behavior and its interaction with the broader, continuously operating crypto spot markets. Future market structure changes or increased weekend trading on CME could alter the frequency and significance of these gaps.
A critical cooling system failure at a data center has halted CME Group's global futures trading, leaving Bitcoin futures stuck and signaling potential market volatility upon reopening.
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