Futures reports are a useful tool for traders that helps to capture the mood among major players and complement the vision of the market situation. Analyst Dmitry Perepelkin and Ekaterina Skobitskaya, the head of the Inception Fund communications department, are talking about the mood prevailing in the “whales” camp of the bitcoin market.
This week we saw a rally, and some even managed to take part. The market is showing signs of recovery. As soon as the major players block the losses on BTC for 2018, they are likely to turn their attention to the Altcoins, which will lead to an increase in activity on the top coins.
The graph above clearly shows the large closure of shorts (about 12 thousand BTC) on the Bitfinex exchange market growth.
Such a 90 degree tilt means that one or several large traders closed short positions at the same time. This circumstance supported the growth of Bitcoin, since covering up the shorts essentially means buying. However, a reasonable question arises as to why such a strong setback subsequently took place.
Besides the fact that cryptocurrency is characterized by increased volatility, you should not forget about the corrective movements, which can be caused by profit taking, opening of shorts and / or closing of the so-called gaps on the Chicago Board of Trade (CME).
The graph above is an example of an ideal mining gap on CME. Gap occurs when during the weekend on the CME price is far behind the market.
On the Bitcoin Futures (Continuous: Current Contract In Front) chart, examples of recent gaps are noted. Statistically, they have very high mining, sometimes even to the last dollar. This must be considered when trading.
As for the COT data, the institutionalists (Asset Managers) partially fixed the profit in the amount of 87 contracts: 199 long positions remained. Spreading also declined. It turns out that only 7.5% of the longs remain protected.
Hedge funds and investment funds (Leveraged Funds), on the contrary, increased the spreading rate to 274 contracts: 12% of longs were insured. It is worth paying attention to the fact that the total number of long positions for these players is increasing and the gap with short ones is reduced.
As for market activity, the hype persists. Direct confirmation of this is the demand for Bitfinex margin contracts.
#Bitfinex keeps providing us with great passive investment opportunities. Market is alive. #USD interest remains in a range between 2-4% per month. Though, #BTC struggles to maintain top level since altcoins barely moving. Not time yet for them pic.twitter.com/LtsTkkwrR5
– Dmitry_Quail (@Dmitry_Quail) May 18, 2019
It can be argued that the market continues to strengthen: many shorts have been closed on Bitfinex, the influx of longs is observed at CME. However, do not forget about risk management. The analytical review of futures and interest rates Bitfinex are only part of the overall market picture.
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