Hedge Funds are Betting Heavily on a Bearish Bitcoin Reversal, Report Shows

Hedge Funds are Betting Closely on a Bearish Bitcoin Reversal, Report Exhibits

Bitcoin’s uptrend over the previous few months has been historic, with bulls taking full management of its value motion and sending it from sub-$10,000 lows in late summer time to highs of $28,500 only a few days in the past.

After reaching these highs, the cryptocurrency’s uptrend stalled, with the previous few days primarily consisting of consolidation as altcoins start gaining some momentum as soon as once more.

This uptrend’s power appears to point that your complete market might be well-positioned to see continuation within the mid-term. Nevertheless, many analysts nonetheless consider that Bitcoin and different main altcoins will put up a sizeable correction within the near-term.

Till BTC reaches the section of its bull market the place it really goes parabolic – posting sizeable strikes greater on a each day, and even hourly, foundation – it might nonetheless be liable to seeing a big decline that clears out over-leveraged lengthy positions and resets its funding/premiums.

It seems that hedge funds are banking on this risk, as this physique of buyers on the CME is now shorter on BTC than they ever have been earlier than.

A few of this short-side stress might be as a consequence of these teams hedging their spot holdings, however the development overwhelmingly means that they anticipate it to see a big draw back motion within the near-term.

Bitcoin Consolidates as Altcoins Acquire Momentum 

On the time of writing, Bitcoin is buying and selling down simply over 1% at its present value of $26,760. That is round the place it has been buying and selling all through the previous couple of days.

The promoting stress seen within the $28,000 area has been fairly intense and will proceed hampering its progress within the mid-term.

Whereas it consolidates, altcoins like Ethereum are gaining some floor in opposition to it, which can point out {that a} sustained bout of sideways buying and selling from BTC shall be what sparks the following “altseason.”

Hedge Funds are Betting on a Huge BTC Pullback

In response to the most recent Dedication of Merchants (COT) report from the CME, hedge funds are broadly flipping brief on Bitcoin.

They now have extra brief publicity to BTC than ever earlier than, which signifies that they’re betting on a powerful correction, as one knowledge aggregator famous:

“21 – December CME $BTC Commitments of Merchants (COT) report – Open Curiosity: 12,603 up 10.8% – Hedge funds web brief new all-time-high (doubtless money and carry trades).”

Picture Courtesy of Unfolded. Supply: TradingView.

Whereas hedge funds are brief, establishments, retail buyers, {and professional} merchants all have a long-bias for Bitcoin.

Featured picture from Unsplash.
Charts from TradingView.