The Commitments of Traders (COT) is a weekly market report issued by the Commodity Futures Trading Commission (CFTC) listing the positions held by commercial traders and the “Smart Money”, the hedge funds and bank institutions in various futures markets in the United States. Since the COT measures the net long and short positions held by speculative traders and commercial traders, it is a great resource to gauge sentiment in the Markets.
Ever since the Chicago Mercantile Exchange launched their respective cash-settled bitcoin futures trading product, I have been monitoring the data to try and identify the next direction for Bitcoin.
The Chicago Mercantile Exchange (CME) Group posted record numbers in 2019 for its bitcoin futures trading, showing renewed interest in crypto's largest asset, with current trading activity up significantly from August last year.
In May 2019, CME tallied its most successful month of bitcoin futures trading since the product's inception in 2017, "trading an average of more than 13,600 contracts each day, equal to ~$515 million in notional value or 68K equivalent bitcoins," McCourt explained. "On May 13, BTC traded a record single-day volume of 33,677 contracts (168K equivalent bitcoin or $1.3B notional)," he added.
Although volume has increased, which is a great thing, I can’t get into the heads of the Smart Money. Open interests appears to support the article discussing volume and the Smart Money has appeared to close their long positions in July, which is correlated to the price decline.
But I would of thought the sentiment would have increased with the price increased earlier this year.
Singapore is the cryptocurrency capital of the world and the uncorrelated data above still tells me that Southeast Asia is still the force driving the price of Bitcoin in one direction or the other and the Smart Money has yet to really arrive into the Crypto space as of yet.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.