When Bitcoin drops, it’s not just traders who are affected. Institutional investors are also deeply concerned about digital assets. Market sentiment is considered important during any cyclical trend change. Bitcoin is currently hovering between $35,000-40,000 but its crash from ATH levels has multiplied due to market derivatives. The current turbid state of the market seems to become clear after 3 weeks. Or we will be able to clearly understand the current conditions only after 3 weeks.
How about the CME Bitcoin futures position?
Since the beginning of April, CME Bitcoin Futures has recorded a decline in Open Position. BTC’s aggressive rally was already making a few investors nervous, but retail optimism continued to push the price up until the momentum waned. OI fell more than 25% in May as daily volumes also took a hit. Moreover, according to Skew, open positions were at a 3-month low at the time of publication.
However, the overall picture does not look as complex as expected.
Despite the strong stance of smart money, the market is cautious
The big capitulation event in the 3rd week of May caused panic in the minds of investors. This divergence was in line with the fact that institutions had begun to cool their interest in crypto investments since the end of February. While some expect these institutional investors to change their position in the market after the drop, the latest CME COT report reveals other things:
According to the report, there have been highly non-reactive approaches to smart money investing. Some traders are currently closing shorts (or buying the current dip).
On the retail side, traders who are expected to have the effect from their long positions are currently trying to follow the bottom positions in order to collect suitable sales in the market.