Analysis: CME's Bitcoin COT report shows an increasing bearish trend among short sellers

Bitcoin's price hovered below $10,500 and above $9,000 for nearly 10 months. During those 10 months, the price fell as low as $3,800 at one point and as high as $10,000 at another, but mostly stayed within that range. Last week's CME COT report [June 16-23] suggested that current market positions appear to be biased towards shorts.

As of June 16, large leveraged and small non-Reportables * positions were virtually identical. Since then, however, short positions have risen sharply. As you can see from the chart below, the leveraged total short position is 9,700 bitcoins, while the total long position for small trades is 7,800 bitcoins.

* Non-Reportables is a class of traders specified in trader Reports (CoT) that represents small investors holding futures positions that are below the CFTC reporting level.

While there have been significantly fewer long-term traders, the bears' position on prices has not changed.

Cryptocurrency prices have been a parallel path up the charts in the last two weeks, and last week there was still a tug of war between big leveraged trades and positions held by small traders, who have the most BTC. However, given the current price and the upward path it has formed, it is arguably more pessimistic about the future direction of the market. As of press time, this upward path had been broken, and the market had begun to wobble and fall slightly, though the overall downward trend had not yet occurred. Bitcoin prices currently hover between $9,586 and $9,216.

Moreover, the current price breaks the 50 DMA standard (yellow), suggesting that the bears' wishes have been met, at least in the short term. For the longer term, the price could fall as low as $8,240, just enough to meet the 200 DMA (blue). As for next week, short positions are expected to increase, especially if the price falls below $9,000 (the previous week's closing price).

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Also of concern is that the expiration of a $1 billion bitcoin option contract on June 26, as previously reported by Rhythm, would be a noteworthy development, especially for its impact on cryptocurrency prices. Some 70,000 bitcoin contracts and 290,000 ETH options expire on June 26.

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In summary, the weekly and daily closing prices for the week of June 22 will determine the direction in which traders hedge their positions. Quite possibly, short sellers will gain more momentum in the short term.

The original address: https://eng.ambcrypto.com/bitcoin-cme-cot-report-hints-at-short-positons-increasing-soon/

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