Another new week, and another gap on the CME Bitcoin Futures chart

If you have followed my blog for any length of time you may recall that I do like to mention gaps.

Especially as they relate to bitcoin and the CME bitcoin futures.

The reason being is because they have such a high propensity to fill.

Historically, something like 90% of all CME bitcoin futures gaps have filled to this point (don't quote on me on that exact figure, but it's somewhere around there)

Which means trading them and paying attention to them makes a lot of sense.

And here we are with another fresh gap staring us in the face as we start our new week...

(Source: https://www.tradingview.com/chart/BTC1!/HCKyoVw5-BTC1-CME-BTC-Futures-opens-with-a-gap/)

Not all gaps are created equal...

One thing to keep in mind is that not all gaps are created equal.

There are breakaway gaps, continuation gaps, common gaps, and exhaustion gaps.

Figuring out which gap we are dealing with can be crucial to how we will play it...

By the way, more on those different types of gaps can be seen here:

https://cointelegraph.com/news/mind-the-gap-identifying-and-trading-4-different-bitcoin-charts-gaps

For our example above, it looks very much like a common gap to me.

A common gap is one that occurs in the middle of a trading range or sideways price action.

As you can see on the above chart, we have been range bound between roughly $8k and $10k, which means I would include any gaps that happen in that range as common gaps.

And common gaps are the second highest probability gap to fill, behind only the exhaustion gap.

That being said, I think the most likely near tern scenario is that bitcoin drifts higher to fill that gap to about the $9,100-$9,200 area, from there we may see another large dip, but my guess is that we gap fill first.

Stay informed my friends.

-Doc