BTC Futures: Bear Population in Decline

BTC Futures: Bear Population in Decline

Short positions for Bitcoin (BTC) futures are on the decline, according to the latest report by the U.S. Commodity Futures Trading Commission (CFTC)

On August 24, CFTC published a Commitment of Traders report for the week ending on August 21. The report shows that the net position for non-commercial contracts of BTC futures totaled to -1266, the all-time low recorded by CFTC. This means that, while the market is still short, there are only 1266 more short positions, which is the smallest difference there has ever been. This data implies that the end of the bear market can be just around the corner.

Commitments of Traders — Futures Only, August 21, 2018

Here’s CME Futures open interest of large holders. [As of] April, you’re starting to see a big increase… about an 85 percent growth rate. If you extrapolate that out, by February 2019, you’re going to have a very robust market here

Brian Kelly, crypto analyst at CNBC

Quick reference on BTC futures

A BTC futures contract is an agreement where Party A agrees to buy a specified number of BTCs from Party B on a specified future date at a specified price. However, BTC futures contracts do not specify parties, which means they can be easily traded. BTC futures were first introduced by CME and CBOE exchanges in January '17.

The launch of BTC futures is blamed by some to have caused the January plunge. They believe that BTC futures compromise market integrity by opening possibilities for market manipulation. The opposing view adduces arguments such as that there is not enough open interest; the trading volume is not sufficient; and margin requirements are too high to offer enough leverage to incentivize market manipulation.

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