Bitcoin's Troubling CME Gap: What Happens If It Closes?

Bitcoin's recent surge past $115,000 is met with a looming concern: a significant gap on the CME futures chart. Historically, these gaps have a strong tendency to close, potentially pulling the cryptocurrency back down and challenging its current bullish momentum.

The Emergence of a Large CME Gap

Crypto analyst Daan Crypto recently highlighted a substantial gap on the CME Bitcoin futures chart. This gap emerged as Bitcoin opened the week significantly higher than its futures market close, creating a void between $110,000 and $111,300. Such a large gap has not been seen in some time, making its presence particularly noteworthy for market observers.

Implications for Bitcoin's Price Action

CME gaps typically form when the Chicago Mercantile Exchange Bitcoin futures close for the weekend, while the 24/7 spot Bitcoin market continues to trade. If the spot market experiences a large price movement during this period, the futures market reopens with a "gap" that often gets filled as Bitcoin retraces to that level. Should Bitcoin fall below $111,000 to fill this latest gap, it could swiftly erode the recent recovery that pushed its price beyond $115,000. While some gaps can remain open for extended periods, the prevailing tendency for them to close implies a potential short-term bearish pressure. Conversely, if Bitcoin can sustain its position above $115,000 with strong buying pressure, the gap might be temporarily disregarded by the market. As of writing, Bitcoin is trading at $116,380, indicating a modest 1.4% gain over the past 24 hours.