A CME gap in trading refers to a discontinuity or "gap" in the price chart of Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME), which occurs due to differences in trading hours between the CME market and the 24/7 spot cryptocurrency market.

Unlike the continuous trading of Bitcoin on crypto exchanges, CME futures operate only from Monday to Friday (typically 6:00 PM Sunday to 5:00 PM Friday ET), so significant price movements over weekends or holidays can create these gaps when the market reopens.

Specifically, it's the difference between the closing price on Friday and the opening price on Monday (or the nearest wick to that close).

Traders monitor CME gaps closely because historical data shows that Bitcoin's price often "fills" them - meaning it tends to retrace back to the gap level over time, providing potential trading opportunities like entering positions anticipating a reversal or continuation.

This phenomenon is most commonly discussed in the context of Bitcoin, though similar gaps can theoretically occur in other CME-traded futures if there's a mismatch between exchange hours and underlying asset activity.

https://www.dbm.academy/faq for more blockchain vocabulary.

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