{"id":406314,"date":"2019-12-05T18:00:06","date_gmt":"2019-12-05T18:00:06","guid":{"rendered":"https:\/\/uniquehot.com\/?p=406314"},"modified":"2019-12-05T16:42:33","modified_gmt":"2019-12-05T16:42:33","slug":"bitcoin-cme-futures-gaps-are-filled-with-95-certainty-but-trading-them-is-risky","status":"publish","type":"post","link":"https:\/\/uniquehot.com\/news\/bitcoin-cme-futures-gaps-are-filled-with-95-certainty-but-trading-them-is-risky\/","title":{"rendered":"Bitcoin CME Futures Gaps Are Filled With 95% Certainty, But Trading Them Is Risky"},"content":{"rendered":"
If you\u2019ve been a crypto investor or traded Bitcoin<\/a> at all during 2019, chances are you\u2019ve heard repeated discussion surrounding the \u201cgaps\u201d on Bitcoin futures charts offered by the Chicago Mercantile Exchange.<\/span><\/p>\n But what are gaps? And are these gaps nothing more than hype, or is the validity in taking trades based on the location of these gaps? One crypto analyst has set out to find out and has done a deep dive into the statistics of CME futures gaps and their correlation in the crypto market.<\/span><\/p>\n Cryptocurrencies are an always-on, 24\/7, 365 days a year market. However, traditional trading desks like CME Group offer<\/a> weekday trading sessions. If Bitcoin<\/a> makes a powerful weekend move, and it often does as liquidity tends to be the lowest on weekends while traders are away from their desks, it can leave a gap between Friday\u2019s late evening close and Monday\u2019s morning open.<\/span><\/p>\n Related Reading | Bah Humbug! If Bitcoin Bulls Can\u2019t Reclaim $7,800 It\u2019s Coal For Christmas\u00a0<\/a><\/strong><\/em><\/p>\n Gaps commonly appear on the price charts of financial assets, when the asset\u2019s price deviates significantly from a trading period\u2019s close to when trading resumes. Gaps are even more common in speculative assets where extreme emotions like fear or exuberance can push the price higher or lower than normal market fluctuations.<\/span><\/p>\n Bitcoin CME futures gaps have become a sort of a meme across the cryptocurrency industry, with many analysts balking at any claims of validity, while others swear by the trading strategy \u2013 and set orders near where gaps need to be filled.<\/span><\/p>\n https:\/\/twitter.com\/thewhiskyguy\/status\/49664514?s=21<\/p>\n One particular cryptocurrency analyst decided to get to the bottom of if CME gaps were a helpful tool to assist traders with taking positions or predicting price movements, or if they are nothing more than a meme.<\/span><\/p>\n The analyst says that not all gaps are filled, and some take weeks before closing, however, as much as 95% of the gaps analyzed eventually were filled. <\/span><\/p>\n Taking the data a few steps further, the analyst found that over 50% of Bitcoin<\/a> CME futures gaps were filled on the day of the new trading session open, with 30% of the remaining gaps filled later during that week\u2019s session. Fewer and fewer gaps are closed the further the time goes by.<\/span><\/p>\n The largest gap on the chart was a $1,085 price move or 12.47% of Bitcoin\u2019s price at the time, and the smallest gap was just $5. The average gap difference was $225, or 2.87%.<\/span><\/p>\n Related Reading | Bitcoin To Spend 2020 In Accumulation Mode, Ideal Buy Zone<\/a><\/strong><\/em><\/p>\nBitcoin CME Futures Gaps Analyzed<\/span><\/h2>\n
Gaps Almost Always Fill, But Trading Them Is A Losing Strategy<\/span><\/h2>\n