Bitcoin: institutional investors increase their buying exposure on futures contracts

Credit: Christo Anestev – Pixabay

The bitcoin price resumed an upward trend last December and since early January 2020, institutional traders increase their exposure to purchases via futures and options contracts.

Key technical factors of the article:

• Every week, the TOC report of the Chicago Mercantile Exchange (CME) & CFTC allows to know the evolution of the open position of institutional traders on Bitcoin futures and options; however, 4 days late.
• Bitcoin price technical analysis suggests that returns on support are opportunities to place.

Position of institutional traders on Tuesday January 14, 2020 (source: CME / CFTC)

Every week, the CFTC and the CME publish the trading positions of several categories of traders on the future contracts and Bitcoin options (this does not concern the volume of OTC Bitcoin). The most interesting category to follow is that of institutional traders because they are the ones who hold the capital and the strongest leverage.

If you look at the second graph of this technical post, you can see that they have largely contributed to the upward recovery last April ; as for individual traders, they are "long only" and weigh less in terms of capital.

The histogram above clearly shows that the institutional investors have increased their exposure to purchases since the beginning of the year (the last known figures are those of Tuesday January 14 in the evening) and above all, that they have started to reduce future contracts held for sale. The net balance is still selling but it is shrinking and tending to become positive again, a pattern that occurred last April in the initial phase of the rebound.

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We must continue to follow these data every Friday evening to see if these strong hands become net buyers in the coming weeks, this is a major key to the sustainability of the trend.

In terms of Bitcoin price technical analysis (classic BTC chart, over-the-counter, below / to be differentiated from the future BTC chart), the market confirmed the upward technical breakout of $ 8,500 by reaching $ 9,200.

Since then, a retracement phase is set up and this return to support is an opportunity to place. The optimal support area is between $ 8,300 and $ 8,400 and the threshold that invalidates the uptrend is under $ 8100. The first primary target for recovery is 9450 $ (8500 €).

Bitcoin price by TradingView

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The technical thresholds and the trend indicated above are based on the technical approach "price, momentum, sentiment, ichimoku". The data come from Bitstamp and the graphics of TradingView. You can consult the history of our technical points on cryptocurrencies in click here.

This content is provided for informational purposes only and does not constitute an investment recommendation. We remind you that theinvestment in crypto assets, including Bitcoin, is extremely risky. Cryptocurrency prices are prone to large and unpredictable price movements.