Bitrabo Editorial
Recent days have seen Bitcoin prices cooling off, dropping from its peak above $71,900 to under $68,000 currently. Amidst this, hedge funds are seen reducing their positions as BTC faced a 7% decline from this week’s high.
Analysis of Hedge Funds Shorting Bitcoin Futures on CME
The most recent data from the CFTC suggests that hedge funds are taking a net short approach on leading BTC futures products on the CME. This move, following the lack of bullish momentum, indicates a possible shift in sentiment regarding the ongoing uptrend.
Despite the bearish sentiment, buyers can still maintain control if they manage to push prices above key levels like $68,000, $70,000, and ideally, $72,000 to overcome the resistance and reach new all-time highs around $74,000.
While the COT report hints at a bearish stance from hedge funds, it may not necessarily imply a direct bet against Bitcoin’s price. Kaiko suggests that these institutional investors might be engaging in a basis trade strategy to leverage arbitrage opportunities between spot and futures markets, hedging against price volatility.
Bitcoin Bulls Leading in the Options Market
Complementing the hedge funds’ moves, options data indicates a strong bullish outlook. Most Bitcoin options volume concentrates on contracts expiring at the end of May and June, predominantly consisting of call options expecting price increases.
The most active strike price for BTC contracts expiring soon is $80,000, indicating a significant number of traders anticipating Bitcoin to surpass this level by the specified expiry dates.