A CME Gap is a price gap that occurs on futures contracts traded on the Chicago Mercantile Exchange (CME), most commonly in Bitcoin and other cryptocurrencies. It forms when the opening price of a new session differs from the closing price of the previous session.
How a CME Gap Forms
CME futures have set trading hours and are typically closed over the weekend.
Cryptocurrencies on spot exchanges trade 24/7, so prices can change significantly during the closure.
When futures reopen, a gap appears between the last closing price and the new opening price.
Why It Matters to Traders
CME Gaps often act as potential price targets – the market frequently moves to “fill” the gap.
They help traders identify zones where price corrections or reversals may occur.
Especially useful in short-term trading for planning entries and exits.
How to Identify a CME Gap
Check the closing price of the CME session (e.g., Friday).
Check the opening price of the next session (e.g., Monday).
If there’s a difference between these prices, mark it as a CME Gap.
The gap can be upwards (opening price higher than the close) or downwards (opening price lower than the close).
Summary
A CME Gap is a statistically significant price gap that can indicate potential future moves in cryptocurrency prices. While not all gaps get filled, many traders use them in short-term trading strategies to identify entry and exit points.