The so-called “CME gap” for bitcoin is nothing more than the difference between the price of BTC and the price of CME futures.
Bitcoin futures contracts have been traded on the Chicago Mercantile Exchange since December 2017.
These are dollar futures on bitcoin, but while direct bitcoin trades in dollars take place every day, 7 days a week, 24 hours a day, CME futures only trade on business days, i.e. 5 days a week, and only during trading hours.
Therefore, it sometimes happens that the price of bitcoin in dollars differs significantly from that of futures, especially on weekends. When this difference becomes very large, it is called a “CME gap”, i.e. a gap that usually has to be closed.
Probably the most famous of these gaps was formed in September 2020, when futures indicated a price drop to levels below $10,000, while real prices stayed above this figure all the time.
Since then, there has been a lot of talk about the hypothetical need to “close the CME gap”, but in reality, prices have never fallen below $10,000 again. In other words, the gap which had accumulated over the weekend of September 5th and 6th in particular was never recovered.
The last CME gap on bitcoin
Over the weekend that just ended, with the price having risen well above $57,000 on Friday, a gap was formed as futures contract prices remained right around the $57,000 mark, while the price rose well above $60,000.
This gap was closed today, with the price returning below $57,000.
As for the September gap, there is no point in trying to figure out if it can be closed or not, because it is practically as if it belongs to a previous era of Bitcoin’s journey.
Moreover, it is worth remembering that even before the halving in May 2020, and before the financial market crash in March 2020, the price of BTC had already risen above $10,000, and even after the crash and after the halving, but before September 2020, it had already risen above that figure.
Therefore, the fateful $10,000 threshold really seems to be water under the bridge now, although in theory there is nothing to guarantee that the price of bitcoin will not go back below that figure.
However, the fact that the last CME gap, formed over the past weekend, has been closed probably removes the need to close any other, even older gaps.