Why do CME gaps often get filled in the cryptocurrency market?

9 answers

• Nov 24, 2021 · 3 years ago
  CME gaps often get filled in the cryptocurrency market due to the nature of the market itself. Cryptocurrency trading operates 24/7, unlike traditional markets that have specific trading hours. This means that price movements can occur at any time, even when the CME futures market is closed. When the CME market reopens, it tries to catch up with the price movements that occurred during its closure, resulting in the filling of gaps.
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• Nov 24, 2021 · 3 years ago
  The filling of CME gaps in the cryptocurrency market can be attributed to the concept of market efficiency. According to the efficient market hypothesis, all available information is quickly reflected in asset prices. When a CME gap exists, it represents a discrepancy between the futures market and the spot market. Traders and investors take advantage of this discrepancy by buying or selling assets to close the gap and bring prices in line with the spot market.
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• Nov 24, 2021 · 3 years ago
  CME gaps are often filled in the cryptocurrency market because of the influence of market psychology. Traders and investors pay close attention to CME gaps as they can act as support or resistance levels. When a gap is left unfilled, it creates a psychological imbalance in the market, leading to increased buying or selling pressure to fill the gap. This psychological factor contributes to the frequent filling of CME gaps in the cryptocurrency market.
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• Nov 24, 2021 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, believes that the frequent filling of CME gaps in the cryptocurrency market is primarily driven by algorithmic trading strategies. These strategies are designed to take advantage of price discrepancies and market inefficiencies, including CME gaps. Algorithmic traders use sophisticated algorithms to identify and exploit these gaps, leading to their frequent filling in the cryptocurrency market.
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• Nov 24, 2021 · 3 years ago
  CME gaps often get filled in the cryptocurrency market because of the presence of arbitrage opportunities. Arbitrageurs take advantage of price differences between different exchanges or markets to make risk-free profits. When a CME gap exists, it represents a price difference between the futures market and the spot market, creating an arbitrage opportunity. Traders and arbitrageurs quickly seize these opportunities, leading to the filling of CME gaps in the cryptocurrency market.
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• Nov 24, 2021 · 3 years ago
  In the cryptocurrency market, CME gaps often get filled due to the influence of technical analysis. Traders who use technical analysis tools and indicators pay attention to CME gaps as potential areas of price reversal or continuation. When a gap is left unfilled, it creates a technical signal that attracts traders to enter the market and fill the gap. This technical analysis-driven behavior contributes to the frequent filling of CME gaps in the cryptocurrency market.
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• Nov 24, 2021 · 3 years ago
  The filling of CME gaps in the cryptocurrency market can be attributed to the concept of mean reversion. Mean reversion suggests that prices tend to move back towards their average or equilibrium levels over time. When a CME gap exists, it represents a deviation from the average price. Traders and investors take advantage of this deviation by trading in the direction of mean reversion, leading to the filling of CME gaps in the cryptocurrency market.
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• Nov 24, 2021 · 3 years ago
  CME gaps often get filled in the cryptocurrency market due to the influence of market manipulation. While market manipulation is illegal and unethical, it does occur in the cryptocurrency market. Manipulators may create or exploit CME gaps to manipulate prices and create profitable trading opportunities. As a result, these gaps are frequently filled as the market corrects itself and adjusts to the manipulative actions.
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• Nov 24, 2021 · 3 years ago
  The frequent filling of CME gaps in the cryptocurrency market can be attributed to the concept of price discovery. CME gaps represent areas where price discovery has not yet occurred or where there is a discrepancy between different markets. Traders and investors actively participate in the market to fill these gaps and establish a more accurate price level. This continuous price discovery process contributes to the frequent filling of CME gaps in the cryptocurrency market.
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