Bitcoin: Are Long-Term CME Players Preparing for a Crypto Collapse?

The Commodity Futures Trading Commission (CFTC) reported, for the week ending last Tuesday, that the Commitments of Traders (COT) reports showed.

Non-commercial large speculators have increased their net position for selling Bitcoin contracts by 0.51 thousand contracts to 2.25 thousand for the second consecutive week. This net position has surpassed the levels seen this year and is now the highest it has been since the start of November 2021.

Hedgers (COMMERCIAL) increased their net position to purchase Bitcoin contracts by 0.60 thousand contracts, bringing the total to 1.39 thousand. This marks the second consecutive week that hedger operators have increased their net position, surpassing the July levels and setting a new record high for futures trading on the CME (since December 2017).

Small speculators (NONREPORTABLE POSITIONS) decreased their net position of buying Bitcoin contracts by 0.09 thousand contracts, bringing it down to 0.86 thousand. This decrease in net position came after a notable weekly increase. The net position has been decreasing since it reached its highest levels on July 18.

The open interest rose by 0.01 thousand contracts, bringing the total to 23.04 thousand.

The ratio of the number of contracts to sell to the number of contracts to buy for large speculators increased by 0.04 over the week, bringing the bearish index to 1.13.

Data from the Bitcoin Commitment of Traders (COT) report has revealed a significant rise in bearish sentiment among large speculators. Major funds have been actively decreasing their buying and selling activity over the past week, resulting in an increase in the net position for the decline of BTC. This net position has now surpassed the levels of the current year and is the highest it has been in the last 25 months. If this trend continues, it could lead to a further decrease in the value of the cryptocurrency.

Hedgers trading for the long-term saw a significant increase in their net position as BTC prices dropped, setting a new record in the process.

Net positioning by small speculators on BTC growth has decreased from its 4.5 month peak. This has caused a rise in bearish sentiment among small investors, which is unusual as it is usually in line with the sentiment of larger investors.

BTC

COT reporting data is essential for medium to long term trading. Large speculators, NON-COMMERCIAL (banks, investment funds) usually trade in line with the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, generally do not have much impact on the market (red line). Hedgers, COMMERCIAL (operators, large companies) usually trade against the trend (black line). The net position is the difference between the number of buy and sell contracts. Open interest is the total of all open positions in the market.