The GAPS: The Silent Trap That Many Traders Ignore

When Bitcoin jumps from $100K to $103K at open without passing through intermediate prices, that’s a GAP. It sounds simple, but that’s where many people lose money.

Why Do They Happen?

Breaking news, institutional dumps, overnight sentiment shifts… The crypto market never sleeps, so GAPS are more common here than in traditional stock markets. ETH rose 1.84% today, but how much of that was due to a GAP?

The 4 Types You Need to Know

Common Gap → It fills itself; don’t get your hopes up. It’s just noise.

Breakaway Gap → This is dangerous. It means something BROKE the consolidation. If you see it, the trend probably continues strongly in that direction.

Runaway (Continuation) Gap → You’re in an uptrend/downtrend, and suddenly another jump appears. A sign there’s still momentum left.

Exhaustion Gap → The last gasp before a reversal. Shows up at the end of a move—everyone shouting “to the moon!”—and then… retracements.

How to Trade This

1. Don’t confuse identification with action: Just because you see a GAP doesn’t mean you should enter. Confirm with RSI, MACD, volume—anything you have.

2. Two main strategies:

   • Follow the GAP: If it’s a break of consolidation, enter in that direction.
   • Wait for the fill: Many GAPS close. Some traders bet that BTC will return to $100K after jumping to $103K.

3. With strong trends: If there’s a continuation GAP and everything points the same way, consider adding to your position.

What No One Tells You

GAPS are inherently volatile. They can close within minutes or never at all. And beware: in crypto, especially altcoins, fake GAPS are common. You see a jump, expect movement, but it’s just a 5-minute manipulation.

Bottom Line

GAPS are tools, not magic signals. Combine them with solid technical analysis and risk management. Otherwise, you’ll end up losing on what looked like an obvious opportunity.