She Filled!

CME Futures Gaps

As unlikely as it may have seemed, sure enough, we have just filled the Gap at $61,435.  The Gap was created during the weekend of the 5th.  That Friday, the CME Futures shut its doors at a closing price of $61,380.  When the Sunday Night candle opened at $62,910, a Gap was born.

Now we have had plenty of Daily Gaps over the course of the week or two.  In fact, we get them all the time.  We had a Gap on the 11th, the 12th, and the 15th.  They were all relatively small and were nothing compared to the 8th.

For a Gap to get filled – the price needs to trade inside of the gap.  Just a little bit doesn’t close the gap – it merely makes the gap a little smaller – as that section of the gap has been fulfilled.  As we can see on the 12th, we were unable to fill the whole gap.  

Even though the 12th couldn’t get the job done, they never stopped trying to fill that gap.  Here we are now, November 15th, 8 days after forming the Gap, 5 days after a Brand New ATH, and sure enough… We Filled The Gap.  

This gap required an 11.50% move to the downside on the futures chart.  That equals a loss of $7975 from the ATH.  If this article leaves you with only one thing, make that one thing that Gaps can be filled – no matter how unrealistic it may seem.

What other Gaps are left?  Glad you asked.  Unfortunately for the Bulls, there are no upside Gaps.  We had a few but they have all been filled.  The next closest Gap we have is a downside gap sitting at $32,270.  Shortly after that is another gap and that one is sitting at $23,685.

We would need to see a 65% loss from the ATH to fill the second gap.  Unfortunately, that is actually pretty realistic as Bitcoin has a tendency to shed 85-90% off the top when its rally is over.  I am not saying the rally is over, I am simply stating that 65% is no problem when it comes to dumptown.  

The other Bad News is that there are still quite a few Gaps to the downside.  Our lowest Gap is at $3120. Now would be a good time to say that not ALL Gaps get filled.  But after doing the math, it’s somewhere around 95% of CME Gaps get filled, so, keep that in mind.  We dop have a triple gap cluster from $9615 – $7595.  Let’s create a hypothetical scenario with a Bull Run to $88,888 as we have mentioned before.  Let’s see what an 85-90% drop would do for us.

An 85% drop from $88,888 would bring Bitcoins value down to $13,330 and would fill all the major gaps that are 16K and above.

A 90% drop from our hypothetical $88,888 ATH would bring the price of Bitcoin down to $8890 and it would just miss our Gap at $8785 but would indeed fill the gap at $9615.

Now, in order to fill the cluster in this zone, Bitcoin would need to drop 91.46% from $88,888 – the equivalent of losing $81,295 from each Bitcoin.  That would bring the price of Bitcoin all the way down to $7595.  Not a bad deal.

Don’t forget about the flipside to this.  A retest of the High would be a 1070% move to the upside!

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