This phrase is everywhere and on other trading sites it's often the go to reference for the Bitcoin price.
I could read about this but since you're all so sympathetic to my Trump-style cognitive decline you will do a better job explaining it.
What is it and why do many believe it's now the number one price controller?
The CME futures market closes every weekend. This creates
a gap in the CME chart every week because the spot market trades 24/7.
It's a common belief among traders (in conventional markets too) that "all gaps must be filled," meaning the market always returns to pre-gap levels. The thinking is that gaps exhibit irrational exuberance and don't establish support/resistance, so they invite corrections.
So I'm not surprised people like Cointelegraph's staff analyst are latching onto this,
acting like playing the CME gap is a sure thing:In last week’s analysis, I highlighted that the CME gap is becoming a regular trading event each week, and less than 12 hours after the analysis was printed, the gap filled to the exact price of $7,265, before the current trend resumed.
The truth is it depends what kind of gap we're talking about. Most of the CME gaps are just
common gaps. The gaps themselves are small and insignificant technically, so one would usually expect them to be filled just in the course of normal price action. This is not some huge revelation or anything.
Some examples of common gaps being filled on the CME chart:
Technically significant gaps are much more interesting (and uncommon).
Breakaway and
continuation gaps confirm the direction of a trend so they are much less likely to be filled.
