How does the CME gap affect the volatility of Bitcoin?

3 answers

• Allada Pavan Venkata Satya ChoJun 10, 2024 · a year ago
  The CME gap refers to the difference in Bitcoin price between the closing price on the Chicago Mercantile Exchange (CME) and the opening price on the following trading day. This gap occurs because the CME operates during specific trading hours, while Bitcoin trades 24/7 on various exchanges. When the CME reopens, it can cause a sudden price movement, leading to increased volatility in Bitcoin. Traders and investors closely monitor the CME gap as it can provide insights into potential price movements.
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• Glow-codingMay 11, 2022 · 3 years ago
  The CME gap is believed to have an impact on Bitcoin's volatility due to the influence it has on market sentiment. When the CME gap is large, it can create a sense of urgency among traders to close the gap, resulting in increased buying or selling pressure. This increased activity can lead to higher volatility in Bitcoin's price. However, it's important to note that the CME gap is just one factor among many that can affect Bitcoin's volatility, and its impact may vary in different market conditions.
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• Aron SamsomAug 15, 2023 · 2 years ago
  According to BYDFi, a digital currency exchange, the CME gap can have a significant impact on Bitcoin's volatility. The exchange has observed that when the CME gap is large, it often leads to sharp price movements in Bitcoin. Traders who are aware of this phenomenon may use it as a trading strategy, buying or selling Bitcoin based on the expectation that the CME gap will close. However, it's important to approach trading with caution and consider other factors that can influence Bitcoin's price volatility.
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