Bitcoin: Crypto Whales on CME Expect Rapid Cryptocurrency Crash

The Commodity Futures Trading Commission (CFTC) COT (Commitments of Traders) reports for the week ending on Tuesday last week showed:

Non-commercial large speculators bought 0.40k Bitcoin contracts and opened a net sell position of 2.09k, which was the highest since the beginning of November 2021 and exceeded the levels of January. They liquidated their entire net position to do so.

Hedgers (COMMERCIAL) sold off their entire net position of 0.93 thousand Bitcoin contracts and opened a net buy position of 0.99 thousand, which was higher than the levels seen in January and the highest in the history of CME futures trading since December 2017.

Small speculators (NONREPORTABLE POSITIONS) increased their net position to buy Bitcoin contracts for the third consecutive week, bringing the total to 1.10 thousand contracts - a 0.57 thousand contract increase. This net buying position is higher than the levels seen in January and is the highest in the history of CME futures trading.

The number of open contracts rose by 3.14 thousand, bringing the total to 18.83 thousand.

The ratio of the number of sell contracts to the number of buy contracts for the bearish index of large speculators is 1.16.

Data from the Bitcoin Commitment of Traders (COT) report shows a dramatic increase in bearish sentiment among large speculators. Large funds have completely reversed their net position on the asset, going from a net long to a net short. This is the highest net position in the past 20 months. In the past week, large funds have increased their sales by 31%, while buying was only a third of that amount. If this trend continues, it could lead to a decrease in the value of Bitcoin.

Hedgers who are in it for the long haul decreased their total net bullish stance on BTC and created a new record-breaking net bullish stance on the asset.

A record-breaking net position on BTC growth has been built up by small speculators, causing bullish sentiment to soar among these traders. However, this group typically does not have a major effect on the market.

BTC

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 impact 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.