Good evening from BitOoda. The CFTC just released Commitment of Traders (COT) report shown below.
We also see BitMEX, CME and Bakkt to all have lower volume shown below.
From this data we are inferring the latest sell-off to be mostly weak longs getting out of the market pushing the price lower NOT new shorts coming in. Because of this, we believe the sell-off shouldn’t be as long and as deep as previous bear markets. In general, we are wary of getting short here because we feel it might be a trap.
We also have noticed the price action this week where the CME futures have led the way lower, not spot. This means the basis was negative in a contango futures term structure. This is very peculiar, and we do not expect for this to continue. We would expect the next COT report to have even greater long liquidations due to the uncertainty/rumors surrounding the space.
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