Bitcoin: CME Crypto Whales Shrink Giant Net Position
The CFTC's COT report for the week ending on Tuesday showed that:
For the second week in a row, large speculators (NON-COMMERCIAL) have decreased their net sell position on bitcoin contracts, bringing it down to 1.86k from 2.08k. This marks a decline from the highest levels seen since the start of November 2021.
Hedgers (COMMERCIAL) decreased their net purchase of bitcoin contracts by 0.33k contracts to 0.80k. After a two-week period of increasing their net position, the hedger operators began to reduce it following a two-fold increase of historical highs.
After a weekly decline, small speculators (NONREPORTABLE POSITIONS) increased their net buying position on bitcoin contracts by 0.11k contracts to 1.05k. This position is now approaching the record levels for the entire history of futures trading on the CME.
The open interest decreased by 0.71 thousand contracts, bringing the total to 16.30 thousand.
The ratio of the number of contracts for the sale to the number of contracts for the purchase of the bearish index of large speculators decreased by 0.01 over the week, now standing at 1.15.
The data from the Bitcoin Commitment of Traders (COT) report indicates that large speculators have become increasingly bullish. Following the monthly expiration of futures, large funds have reduced their selling and buying, resulting in a decrease in the net position for BTC. This net position has been declining from its peak levels over the past 20 months. If this trend continues, it could be a positive sign for the future of the cryptocurrency.
Hedgers with a longer-term outlook experienced an increase in optimism as they reduced their net short position to its lowest level ever.
Small investors have once again increased their net holdings of BTC, which is a relatively rare occurrence that coincides with the sentiment of larger investors.
COT report data is essential for medium and long-term trading, and is mainly used by large speculators, NON-COMMERCIAL (banks, investment funds). These traders usually follow the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, however, have little effect on the market (red line). Hedgers, COMMERCIAL (operators, large companies) usually go against the trend (black line). The net position is the difference between the number of buy and sell contracts, while open interest is the total of all open positions in the market.
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