Bitcoin COT Data: Smart Money Goes Net Long With | Crypto News
Bitcoin futures positioning among non-commercial merchants is swinging sharply toward internet long publicity, a transfer technical analyst Tom McClellan (editor of The McClellan Market Report) says has arrived “with some urgency” in the latest weekly Commitment of Traders (COT) report and one that has coincided with notable market outcomes in prior, equally excessive episodes.
Sharing a chart of Bitcoin futures (price on a log scale) alongside non-commercial internet positioning, McClellan argued that in Bitcoin’s case, large speculators successfully operate as the “smart money” cohort, because the market lacks the standard industrial hedger presence seen in conventional commodity futures.
“The non-commercial traders of Bitcoin futures are usually the smart money,” McClellan wrote. “This week’s COT Report shows that they are moving net long with some urgency. Look back at what the last two similar excursions led to. But remember, this is ‘a condition, not a signal’.”
Why Non-Commercials Matter In Bitcoin Futures
McClellan later expanded on how he frames the CFTC’s weekly report, which breaks futures positioning into commercials, non-commercials, and non-reportables. In corn, for instance, commercials may be producers or end customers; in Bitcoin, he says that class is skinny. “In Bitcoin, there are hardly any traders who qualify as Commercial traders,” McClellan wrote. “So in an unusual circumstance, the Non-commercial traders fill the role of being the smart money.”
That distinction issues because COT just isn’t about absolute long or short curiosity, every futures contract has a long and a short by definition, but about who is on each aspect. “Every futures contract is simultaneously one long and one short position, held by different parties. So the number of longs will always equal the number of shorts,” he wrote. “What matters is who holds the positions.”
McClellan also cautioned against importing equity-market instinct about short curiosity into futures positioning. “So a large short position in a stock represents potential energy which could get converted into price movements via short covering,” he wrote. “COT data don’t do that. They just represent expert opinion.”
The core dispute in the X thread wasn’t whether or not COT may be useful, but how to interpret timing. Trader toni (@tonitrades_) agreed the dataset has worth but questioned whether or not futures positioning merely follows spot momentum. “COT data has historically been a solid indicator, no argument there,” toni wrote. “But non-commercial positioning often lags spot market moves by weeks. By the time futures traders pile in, the initial momentum is usually priced in already.”
McClellan pushed back on that sequencing. “I think you meant that their positioning PRECEDES price moves sometimes by weeks,” he replied, underscoring his view that positioning extremes can show up forward of significant market strikes, though not on a predictable schedule.
That’s where the thread landed: with an emphasis on uncertainty. Jim Osman (@EdgeCGroup) summed it up succinctly: “Timing still uncertain.” McClellan agreed. “Exactly, hence my admonition.”
In his longer clarification, McClellan reiterated that most weeks the COT report has no actionable message, but that extremes may be informative with a essential caveat. “A lot of the time there is no useful message in the COT data for each futures contract,” he wrote.
“But when an extreme develops like now in Bitcoin, then we can get useful information. But as with any overbought or oversold reading on any indicator, COT data only reflect a ‘condition’ not a signal. The data will not tell you when that condition is going to matter, only that it should matter, sometime.”
At press time, BTC traded at $65,663.
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