CMR Chart of the Week - Bitcoin

Will Positioning Get Max Crowded?

Bitcoin future positioning continues to flip flop back and forth as price trades in the same range after Bitcoin hit all-time highs early this year. Last week price broke down below the range but quickly recovered. Interestingly enough, Commercials became net-short Bitcoin after the latest COT data release, for the first time since May 2024 and even more notable is Large Speculators are now net-long, which they have not done since October 2023. After they closed their longs in October 2023, the rally in Bitcoin started and accelerated in 2024 as they continued to short.

From a positioning standpoint, there is still limited edge as there isn’t enough historical data to back test and index positioning to really see who is the best fade is once they get max crowded. Recently, COT did show that Large Speculators have been on the wrong side of the trade especially the early rally in 2024 (Jan - Mar) and price did not top until they covered most of their shorts in April/May. Will this be the case here where Bitcoin starts to drop and they continue to buy the dip? At least it will be another data point to watch and confirm if Large Speculators are the ones to fade when it comes to Bitcoin.

As a bonus, here is the Ethereum chart that shows a similar trend in positioning:

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Thanks,

Jason Shapiro & The CMR Team

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