Institutional traders were net short 1,822 Bitcoin, suggesting they see the downside in the coming weeks and months
Bitcoin price has been stuck in the $ 9,000 zone for weeks. At press time, BTC is hovering around $ 9,300, with no signs of a break out of this area.
BTC/USD 4 hours chart | Source: Tradingview
Traders organize short Bitcoin through the future of CME
According to a chart from CryptoUnprinted, a report published by the Chicago Mercantile Exchange last week revealed that institutional traders are still net short on the exchange’s Bitcoin futures market, about 1,822 BTC.
This came shortly after institutional traders massively increased their short positions near the high of $ 10,500 earlier this month. This group of traders has historically been somewhat accurate in predicting market trends. A week before the launch of Bakkt in September last year, the organization was net short. And building up to the big crash to $ 3,700 this year, they built a significant net short position.
It’s not clear why institutional traders are inclined towards Bitcoin, but it seems that Wall Street is trading in parallel Bitcoin and stocks. This is not a skeptic because, according to the JPMorgan report, cryptocurrencies have been trading more during this time, the same level as risky assets such as stocks.
Some institutional investors are long term bullish
Nonetheless, many institutional players are raising long-term prices for Bitcoin and cryptocurrencies, despite expectations of a short-term correction.
Billionaire investor Paul Tudor Jones revealed in May that he is buying Bitcoin futures with his personal and fund money because he thinks the cryptocurrency will perform well in a world where fiat money is being debased.
Fidelity Investments, a $ 2 trillion asset manager, published a survey this month outlining institutional investment in the cryptocurrency space. The company recognizes that the majority of respondents, organizations in the US and Europe, are interested in digital assets. Because digital assets are uncorrelated, strong/innovative technology plays, and have a high potential upside.
A weak S&P 500 and global equities market could threaten the Bitcoin bull case
According to Wall Street companies, in recent weeks, cryptocurrencies have absolutely no correlation with the stock market. Specifically, Bitcoin and other cryptocurrencies do not offer feasible diversification benefits compared to traditional stock/bond portfolios.
And JPMorgan analysts think that after the March crash, cryptocurrencies were actually trading like stocks, reducing their value proposition. This means the S&P 500 will crash, and so will Bitcoin.
And unfortunately for bulls, prominent investors see the S&P 500 pulling back as the economy fails to match the speed of the recovery in the price of stocks.
However, this is just an assumption and our job is still to wait to see how reality will grow!
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