Institutions are responding to the price action by closing their shorts they opened via the CME’s Bitcoin futures market
Bitcoin price is moving higher after bottoming out at $ 11,150 last week. At press time, BTC is trading around $ 11,699 – above the critical support as we enter weekly candlestick closing, which bodes well for the bulls. Institutional investors seem quite sensitive to this timing and should have closed short orders they opened through CME’s Bitcoin futures market.
After CME reported institutions were contesting short Bitcoin, they secretly closed orders amid price sensitivity
Last week, the cryptocurrency data tracker “Unfolded” reported that institutional investors using CME opened the largest Bitcoin short order ever. In total, there were 3,119 BTC contracts opened in a short time.
Chart of BTC’s price action since the start of 2018 with CME futures positioning from crypto data site/news aggregator “Unfolded” | Source: TradingVIew
However, this is changing.
Based on a report from Unfolded according to data from CME’s Commitment of Traders Report on Aug. 30. 30, we can see that institutional investors closed 2,000 contracts at once. Interestingly, this happened when retail investors on the platform closed a large portion of Bitcoin’s long positions on Bitcoin futures.
The last time institutions closed BTC short orders in unison was when the price of Bitcoin was in the process of rising from its March low to its recent high. It is currently not clear whether a similar trend will reappear.
On the other hand, the significant change from the BTC CME long/short orders suggests a lot of people are eyeing this market.
The macro trend is in favor of BTC
It’s not clear why this change is happening, but there are trends in favor of Bitcoin that are very positive.
In it, Mike McGlone, senior commodities analyst at Bloomberg Intelligence, recently wrote the following about Bitcoin’s outlook as follows:
“Stuck between 3-9x over the past few years, the price of #Bitcoin per ounce of #gold tilts the crypto toward resuming appreciation, if volatility history tells us anything. The Aug. 19 cross rate of 6x is the same as in 2017, yet Bitcoins’s volatility has dropped relative to gold.”
Regarding macro factors, Jerome Powell of the Federal Reserve last week announced that the central bank could allow inflation to surpass 2%. Fidelity Investments and other organizations in the crypto space are showing interest in crypto by launching Bitcoin products to cater to user needs.
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