Bitcoin Weekly Report: Market sentiment has quietly changed, only retail investors are obsessed with shorting

The latest CFTC CME Bitcoin Positions Weekly Report (April 20 - April 26) released on April 30 shows that the total open interest of Bitcoin standard contracts ended the previous two weeks of decline, falling from 11276 to 10709. The gains in the previous statistical period were almost completely lost. The weakening of the market has had a relatively direct impact on market sentiment, and the choices made by various accounts behind the decline in total open interest are the key points of this weekly report.

The largest dealer account's long position dropped from 377 to 364, and the short position dropped from 1124 to 872. In the latest statistical period, dealer accounts once again carried out a two-way simultaneous reduction of long and short positions. However, compared with the adjustment of positions in the previous statistical period, which mainly reduced long positions, the short positions in the latest statistical period were greatly reduced. Therefore, the proportion of long positions in such accounts has slightly rebounded, but it has not yet returned to more than 30%. The overall positions of large institutions are still in a clear net short position. However, after expressing a relatively clear bearish attitude and accurately "betting" on the downward trend of the market, such accounts quickly carried out short-term profit persistence, which to a certain extent showed a conservative attitude in the short term. It can be considered that large institutions, under the premise of an overall bearish attitude, are not optimistic about the extreme unilateral dive in the short term, and believe that the market will have a weak and volatile trend.

The long position of asset management institutions decreased from 6214 to 6147, and the short position decreased from 570 to 523. In the latest statistical period, asset management institutions carried out a simultaneous reduction in long and short positions similar to dealer accounts. The net long adjustment in the previous statistical period did not continue, which confirms our judgment in the previous weekly report that such accounts had carried out a lagged adjustment to follow the market. The adjustment in the latest statistical period is not very directional and is only a routine risk control option.

The leveraged fund's long position rebounded from 1194 to 1714, a four-week high, and the short position rose from 6226 to 6812. In the latest statistical period, the leveraged fund "uniquely" increased its long and short positions simultaneously. While abandoning the previous idea of ​​reducing positions that lasted for several statistical periods, the long position even hit the second highest level this year. In the weak market environment, the leveraged fund's "contrarian" choice is intriguing. This type of account expressed this change in attitude at this seemingly difficult to understand time node, at least reminding us that we need to be cautious about the prospect of further declines in the market, and avoid blindly chasing shorts.

The long position of large accounts dropped from 833 to 654, again hitting a two-year low, while the short position dropped from 1067 to 686. Large accounts increased their long and short positions simultaneously during the latest statistical period. It is worth noting that these accounts almost achieved a reversal from net short to net long in the simultaneous reduction of positions. In the short term, the overall performance of the position adjustment was biased towards long positions, and no short-chasing operations were carried out in line with the market. It can be seen that these accounts actually do not have much expectation for the further decline of the market.

Retail investors’ long positions dropped from 1155 to 942, and short positions rose from 786 to 928. Retail investors made net short adjustments in the latest statistical period, and were the only type of accounts that made clear unilateral adjustments in the latest statistical period. In addition, retail investors’ long and short positions were almost even, and the proportion of long positions dropped to a new low since the end of November last year. The continued decline in the market has dealt a heavy blow to the sentiment of retail investors.

Total open interest in Bitcoin micro contracts fell from 20,968 to 20,840.

The long position of the dealer account increased from 1804 to 2712, and the short position decreased from 1225 to 1012. The dealer account made a clear net long adjustment in the micro contract. This idea is more radical than the conservative bullish attitude of this type of account in the standard contract, but it also consolidates the judgment that the thinking of this type of account has shifted from short to long.

The holdings of asset management institutions are very limited and there have been no obvious position adjustments, so we will not elaborate on them in detail.

The leveraged fund's long position dropped from 7846 to 7260, and the short position dropped from 17320 to 16452. The leveraged fund reduced its long and short positions in the micro-contract simultaneously. This choice directly hedged the standard contract's position adjustment. In this case, the idea of ​​the standard contract is generally "main judgment", so do not over-interpret the choice of micro-contracts.

The long position of large investors decreased from 7125 to 6933, and the short position increased from 983 to 1580. The large investor accounts made net short adjustments in the micro contracts, which was also hedged with the long adjustments in the standard contracts. The micro contract selection is not regarded as a directional preference.

Retail investors’ long positions fell from 3850 to 3563, and short positions rose from 1056 to 1417, which is a net short position consistent with the standard contract. Retail investors are the "absolute majority" who are firmly bearish in the market.