Price gaps
A price gap is when a candle opens above or below the previous candle's range without overlapping it, leaving an area of price where no trading took place. Gaps are rare on crypto spot charts, which trade 24/7. They are most often seen on CME Bitcoin futures, which close at weekends, and on low-liquidity pairs.
What is a price gap?
Normally each candle opens close to where the previous one closed. If a candle opens above the previous candle's high or below its low, an empty space is left on the chart between the two candles. That space is a price gap. On CME charts in particular, a gap is also measured more loosely, as the distance between the previous close and the new open; saying which measure you use avoids confusion.
A gap forms when price changes while the market is closed or trading is very thin. When the market reopens, the first trade happens at a price far from the last one. On that timeframe, no trades took place at the prices in between.
Why gaps are rare on crypto spot charts
The crypto spot market trades 24/7; there is no overnight, weekend or holiday close. Because price trades continuously, each candle usually opens very close to the previous close. On the major pairs, a real gap on the 1H, 4H or 1D chart is therefore rare.
Even in sharp moves price passes through the levels in between; those levels show as a long body or wick, not a gap. Moving through a zone quickly and skipping a zone without any trading are different things.
CME Bitcoin futures gaps
Bitcoin futures on CME follow the exchange's trading hours: they do not trade at weekends or on some holidays, and there is a short break every weekday. The spot market keeps trading during that time. When the futures market reopens, price opens at the level spot reached in the meantime, and a gap can be left between Friday's close and the new open.
These gaps do not appear on the spot chart; the same hours are filled with ordinary candles there. So a CME gap is a gap on that exchange's chart, not in the market as a whole.
The "gaps get filled" belief
- A common view is that price eventually returns to the area of the gap and "fills" it.
- Many CME gaps have been filled later on. But some stayed open for a very long time, and some have not been filled to this day.
- When a gap will fill is unknown. Some fill within days, others months later, so saying "it will fill" carries no timing on its own.
- Filled gaps are remembered and unfilled ones forgotten. That selective memory can make the belief look more reliable than it is.
A gap filling is a possibility, not a rule. The gap area can be noted as a reference price may return to; on its own it does not create an expectation of direction.
Gaps on low-liquidity pairs and exchanges
On a thinly traded pair or a small exchange there may be no trades at all during a candle. If the next trade comes at a distant price, the chart shows a gap or bodiless candles made of a single price. These often describe a lack of trading rather than a price move.
The same asset can look different on different exchanges: a chart without gaps on a large exchange can have gaps on a small one. Maintenance outages and newly listed pairs can create gaps too. So when reading a gap, say which exchange's data you are looking at.
What it shows, what it does not prove
What it shows
- That no trading took place on that chart within a certain price area
- How much price changed while the market was closed or trading was thin
- A reference area that price may come back to later
What it does not prove
- That the gap will fill, or when
- That the same gap exists on the spot market or on other exchanges
- That a move in the direction of the gap, or against it, will follow
The MarketLevelMap view
How it relates to zones
A gap is not a single price but an area of price with two edges: it sits between one candle's extreme and the next candle's extreme. In that sense it can be read like a band. Places where a gap overlaps a support or resistance zone can be noted as areas where price may react if it comes back.
A CME gap, however, does not exist on the spot chart; those prices did trade on spot. So when reading zones on a spot chart, a CME gap is treated as separate information, not as a replacement for the zone.
Often confused with
- What is volatility? Contracting and expanding rangesA fast, large candle shows high volatility but is not a gap; price did trade at the levels in between.
- Why the candle close mattersThe distance from a close to the next open is the loose measure of a gap; in a full gap the two candles' ranges do not overlap at all.
For general information only. Not investment advice.Last updated: