Chart of the Week - Bitcoin
Bitcoin is not a market that I trade as part of the CMR strategy since there is not enough history to back test max crowdedness and what the best look back period to index trader positioning (If you want to learn more about this strategy, we have lots of free videos on our YouTube Channel).
With that said, during Bitcoin's entire history on the Futures market (started at end of 2017), it has never been able to rally when Large Speculators were net-long as shown in the chart. In contrast, the last two rallies happened after Large Speculators were extended to the short side.
Something to watch for each week as new COT data is released on Fridays and shows updated positioning data.
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Hi Jason
I have observed your point about BTC being disrupted by excessive long positions.
I am convinced that exchanges are manipulating the market to protect themselves.
They are selling more BTC than they have (paper BTC) and when US traditional markets are closed they manage to liquidate the highly leveraged longs.
Shorts get similar treatment but at a much smaller scale.
I think this window will slowly and then suddenly close but they are making a fortune at the moment doing this.
The exchanges don't even need to collude directly as the opportunity/exposure is so patent and their mutual self-interest so aligned that the price suppression self actualises.