🔍 What is the gap?
The price gap (Gap) is an area on the chart where no trading occurs, causing the price to jump from one level to another without a gradual transition in between.
It appears as a space between two candles:
Either opening a candle significantly higher than the previous close
oropening significantly lowerthan it
🎯 How is the gap formed?
Gaps often form as a result of strong events that suddenly change the balance between supply and demand, such as:
Important news (economic decisions – earnings reports – government statements…)
A gap between the close of one day and the opening of a new day (in markets that halt)
An explosion in liquidity or its absence
Large orders enter the market unexpectedly
In crypto — because it’s a 24/7 market — real gaps are few, but they are clearly visible in:
CME gaps for Bitcoin
Or gaps resulting from very rapid movement that causes trading not to record all prices.
🧩 Types of price gaps
1) Breakaway Gap
Appear upon breaking strong support/resistance.
Indicates the beginning of a strong new trend.
2) Runaway / Measuring Gap
Appears in the middle of the trend.
Reflects the strength of the movement and its momentum.
3) Exhaustion Gap
Appears near the end of the trend.
Alert for a potential strong reversal.
4) Common Gap
Ordinary gaps that do not carry significant meaning, often closed quickly.
5) CME Gaps
Specific to Bitcoin, as the CME exchange operates only 5 days.
Every weekend holiday causes a gap between Friday's close and Monday's open.
🧠 Should you fill the gap? (Gap Fill)
Many traders believe that "the gap must be filled."
The truth:
Not a 100% rule
But historically, most gaps close as the price returns to test untraded areas.
Closing the gap means:
The price returning to the entire area where the gap appeared.
🔥 How are gaps used in trading?
✔️ Setting price targets
When a gap appears behind the price, expect it to return later.
✔️ Confirmation of direction
Breakaway gaps = beginning of a trend
Exhaustion gaps = potential end
✔️ Identifying strong supply and demand zones
✔️ Entering buy/sell orders based on "filling the gap"
📌 Advantages and disadvantages of trading with gaps
✅ Advantages:
Provides high clarity on the upcoming movement
Easy to spot on the chart
Used by institutions and large traders
❌ Disadvantages:
May delay in closing
The type of gap may be misleading for the novice trader
Some gaps do not close except after weeks or months
