Fair Value Gaps (FVGs) are essentially price gaps or “imbalances” on a chart – areas where one trading period’s closing price and the next period’s opening price have a significant gap with little to no trading in between. In fast-moving markets like Bitcoin, these gaps highlight zones where the market moved too quickly for liquidity to keep up, leaving behind a pocket of unfilled orders.
When trading Bitcoin (BTC), FVGs are important because they often act as liquidity zones – prices tend to revisit these gaps about 70–80% of the time as the market seeks to “fill” the inefficiency. This makes FVGs valuable for traders to identify potential support and resistance areas where big players might step in.
Today, with Bitcoin’s price fluctuating around all-time highs, FVGs matter more than ever. The current BTC market trend has seen rapid moves and pullbacks, creating notable gaps. In short, understanding FVGs can help work around Bitcoin’s volatile swings by pinpointing where hidden liquidity lies.
What is an FVG? In simple terms, it’s a gap on a candlestick chart where price jumped so quickly that a portion of the chart shows a “blank” between candles. Technically, an FVG occurs when there’s a noticeable difference between one period’s closing price and the next period’s opening price, with minimal or no trading in that range.
This often happens during high-impact news or sudden market surges/drops. The gap represents a market inefficiency, an area where buying and selling didn’t match up, leaving orders unfilled. Such gaps tend to magnetize price later as the market seeks equilibrium, either partially or fully “filling” the gap. In essence, an FVG shows that the market, in its haste, left behind a trail of liquidity that can become a future target for price action.
Bullish vs. Bearish FVG: An FVG can signal either potential support (bullish) or resistance (bearish) depending on its context. A bullish FVG occurs when price jumps upward, leaving a gap below the current price. In a classic three-candle pattern, you might see a large up candle (green) where its lowest wick stays above the highest wick of the candle two periods before – creating an empty space in between. This gap suggests an aggressive buy-side move; the market may later dip back into this gap, which often acts as a support zone for another rally.
Conversely, a bearish FVG forms when price plunges downward, leaving a gap above the current price. Here, a big down candle (red) has a highest wick that remains below the lowest wick from two candles prior, so no overlap occurs. The resulting gap within that drop is an area of potential resistance, price may rebound up into this gap but then face selling pressure as the gap fills.
Why do FVGs exist? They’re rooted in market psychology and liquidity. When Bitcoin’s price moves with extreme momentum, as it often can, not all pending orders get filled – creating a temporary void. Think of an FVG as an imbalance where buying far outweighed selling (or vice versa) for a short period. Traders who missed the move leave orders in the gap zone, and countertrend players (like profit-takers or big institutions) also see these unfilled areas as attractive levels to transact.
This is why gaps commonly get filled: they act like a magnet for price – drawing the market back to that level before the prior trend continues. In practical terms, a bullish gap signifies latent buy orders waiting below (support), while a bearish gap signals sell orders lurking above (resistance). By identifying FVGs, BTC traders gain insight into where liquidity pools lie, which often coincide with pivot points in the market.
Identifying a Fair Value Gap on a Bitcoin chart is a step-by-step process. The easiest way is to look for the distinct three-candle pattern described above. Here’s a simple method to spot an FVG:
Once identified, these gap zones are your key levels to watch. Let’s highlight some top FVG levels on Bitcoin as of mid-September 2025 (on the daily timeframe):
Spotting a Fair Value Gap is one thing; trading it effectively is another. Here are four streamlined strategies:
These tactics make FVGs actionable while keeping risk in check. Remember: not all gaps fill cleanly, so patience and discipline are key.
Fair Value Gaps offer high-probability entries, but Bitcoin’s volatility demands strict risk control:
In short: use moderate leverage, maintain a buffer, set hard stops, and size positions so losses are tolerable. Protecting capital comes first; profits follow from discipline.
Fair Value Gaps (FVGs) are imbalance zones where price moved too fast, often revisited later as liquidity is filled. To trade them effectively, mark the gap, wait for a retrace, and enter with the prevailing trend, setting stops just beyond the gap and targeting logical structure levels such as prior highs or lows.
FVGs serve as valuable tools to map support, resistance, and potential reaction zones. Risk management is critical, keep leverage modest, maintain a margin buffer, cap risk at 1–2% per trade, and always use stops. The best results come when FVGs align with broader market structure, multi-timeframe bias, and volume or order-flow confirmation. By following a structured process, planning the trade, sizing the risk, executing with discipline, and reviewing outcomes, FVGs can evolve from a simple chart pattern into a repeatable trading edge.
Anush is a crypto researcher dedicated to making blockchain insights clear and accessible. A proud Solana maxi who still appreciates a good Layer 2 debate, he dives deep into market trends so others don’t have to (but really should). Passionate about simplifying crypto, he strives to make the space less intimidating and a lot more relatable, one report at a time.
