CMR Chart of the Week 4/8/2024

BITCOIN

Today we highlight positioning in Bitcoin Futures. The contract is up over 50% year-to-date and it seems every dip is being bought as it trades near all-time-highs. We did see price get rejected as Bitcoin attempted to make new highs in late March and the start of April but today it shows strength to the upside. It is worth noting that as of April 2nd, the Commitments of Traders (COT) report that provides trader positioning data, showed Commercial Traders (red column), also known as Hedgers, became net-short Bitcoin futures, for the first time in 2024. The chart below from TradingView with the CMR COT indicator clearly shows Large Speculators (blue column) bought the dip as of Tuesday, April 2nd, which inversely caused Commercials to become net-short providing liquidity to the contract.

A longer-term view at trader participation using another CMR COT chart format shows that positioning can become more crowded as we saw Large Speculators become max crowded long (and Commercials max crowded short) in September 2023, only to cover their long positions right before the epic run Bitcoin would have from October 2023 until now. Large Speculators continued to fight the trend up increasing net-short positioning which ended last week. This next COT report will be interesting to see what Speculators do with this week’s price action.

The COT data changes each week and is published on Friday at 330pm ET. One advantage of being part of the Crowded Market Report, is receiving updated COT charts minutes after the data is published while trading hours are ongoing on Friday before the week ends and trading stops. We are proud of being in industry-leader in providing the best COT charts available and first-to-market once the new data is updated.

So this Friday, it will be interesting to see if positioning continues in the same direction and gets to a level of extreme crowdedness where a potential high reward/low risk trade opportunity becomes available.

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Thanks,

Jason Shapiro & The CMR Team

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