CMR Chart of the Week - Bitcoin
Will Bitcoin Rally, Go Down or Continue to Trade in a Range?
As Bitcoin’s price continues to be volatile today after Donald Trump’s speech at the annual Bitcoin Conference in Nashville, trader positioning does not give any indication of where Bitcoin is going at this time. Positioning has been neutral for several months now and price has followed suit trading in a range since hitting all-time highs in mid-march 2024.
Looking at the past 12 months, it appears fading Large Speculators when crowded would have worked. Looking the the first chart below, Bitcoin rallied almost 100% once Large Speculators covered their long position and Large Speculators actually increased their short exposure through the first quarter of 2024 fueling the rally as they started to cover in March. After they reduced their short exposure positioning became more neutral, and that is when we see Bitcoin chop around between $55K and $75K.
A closer look at positioning shows how neutral it is, as no trader group is crowded, which opens up the possibilities for where Bitcoin price can go. From a risk/reward perspective, it appears the logical option is to trade small or wait until until positioning gets max crowded and then look for news failure confirmation.
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Thanks,
Jason Shapiro & The CMR Team
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