Bitcoin Smart Money Sentiment 8/9/18 – Smart Money Continues To Enter The Crypto Space
Since the SEC rejected a second attempt by the Winklevoss twins from listing the first-ever cryptocurrency ETF on a regulated exchange in late July, the price of Bitcoin has declined by almost $2000. Nevertheless, every other day we hear Smart Money entering the crypto space.
In recent news, two of the largest crypto exchanges have recruited two veterans from Wall Street to help lure big money investors. Amy Yu, who previously worked in sales for synthetic products at JPMorgan, joined BitMEX to head up institutional sales and Lauren Abendschein, formerly a director at Credit Suisse, has joined Coinbase as a manager of institutional sales. This is on top of news that Coinbase onboarded a $20 billion hedge fund onto its platform in recent weeks as well.
So although the price of bitcoin has dropped almost 25% in recent weeks,
I have been tracking the quantity of Bitcoin futures the Smart Money has been buying and selling since December and the Smart Money Sentiment tells another story.
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.
Back in December, the graph suggested Smart Money push the price of Bitcoin all the way down to currently levels based on sentiment. When the exchanges started offering Bitcoin futures, the Smart Money sentiment was the most bearish ever. However, dispite recent price declines, the Smart Money is still relatively bullish. Once sentiment crossed over 60% back in March, the price of Bitcoin started to level off and has been within a $4000 range. Thus, the graph suggests the 60% level is a key sentiment level to watch moving forward. If the Smart Money sentiment drops below 60%, price may fall decisively below $6000.
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.
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by rollandthomas
Thanks for update
The smart money is
with bitcoin for the long haul
great returns for all
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Smart money will continue to look for opportunities but will most go OTC to avoid detection. Most of these bets on futures are probably pure speculation.
Interesting comment, the futures volume is low, I anticipate things will pick up, but I think you are right there will be a lot of competition in the OTC markets.
That's a good point. Though I think that will change once the overall crypto market is multi-trillion dollar value and when there are ETFs. In other words, when the market is large and liquid and can support big purchases without being significantly moved...
Interesting observation.
I like insights like this post. Pretty clever to be able to pull sentiment from COT. I actually didn't realize that it would have a COT report, but that's great to know.