The performance of large institutions' portfolio adjustments "revealed" their clear attitude towards the future market

CME Bitcoin Futures

On July 3, the CFTC released the latest CME Bitcoin futures weekly report (June 23-June 29). During the statistical period, Bitcoin stopped falling and rebounded, but the rebound for the whole week did not exceed US$3,000. Compared with the decline of nearly US$10,000 in the previous statistical period, the market did not really get rid of the relatively weak area. How much this stop-loss performance can boost market sentiment is the key to this weekly position report.

The total positions (total open positions) fell sharply from 7,914 to 6,788 in the latest data, which was a new low in nearly 61 weeks. The last time the total positions were less than 7,000 was in May 2020, nearly 14 months ago. The slight rebound in the previous three weeks seemed insignificant in the face of this round of substantial reduction in positions. The further decline in the market in the previous statistical period led to a significant intensification of panic sentiment. Although there was a slight rebound in the latest statistical period, the rebound was weak, and the market participation enthusiasm further declined in the short term.

From the perspective of sub-item data, the largest dealer's long position decreased from 255 to 248, short position further decreased from 145 to 120, long and short two-way (hedged) positions decreased from 81 to 49, and large institutions carried out long and short two-way simultaneous reduction in the latest statistical period. Although the idea of ​​net long adjustment when prices fell significantly in the previous statistical period was not maintained, the reduction in short positions was still greater in the process of two-way simultaneous reduction in positions in the latest statistical period, resulting in a further increase in the proportion of long positions in the current long-short position ratio data. This type of account still maintains a relatively clear optimistic attitude towards the market outlook.

The long positions held by asset management institutions increased from 419 to 542, a 23-week high, while the short positions decreased from 739 to 613. Corresponding to the new high in long positions, the short positions hit a 10-week low, and the two-way positions remained unchanged at 0. Asset management institutions made a fairly clear net long position adjustment in the latest statistical period. Although the long-short conversion was relatively jumpy in the past few statistical periods, the net long position adjustment attitude in the latest statistical period was quite firm. The two types of large institutional accounts are now back on the same front, and they have clearly expressed their bullish attitude towards the future market in an environment where the market remains relatively weak.

In the latest statistical period, the long position of leveraged fund accounts decreased from 2563 to 2291, and the short position decreased from 4927 to 4357, which hit a new low in nearly 60 weeks. The two-way position decreased from 474 to 416. In the latest statistical period, leveraged funds once again reduced their long and short positions simultaneously, and the reduction was amplified. It is worth noting that the short position of such accounts hit a new low in more than a year. For this reason, in the case of a sharp decline in long positions, the long-short position ratio of such accounts remained relatively stable. Leveraged funds did not throw out a clear unilateral tendency in the process of adjusting positions. The recent rise and fall of two-way positions is not continuous, so do not over-interpret it.

In terms of large-scale positions, long positions fell from 1910 to 1389, which also hit a 60-week low. Short positions fell from 361 to 180, and two-way positions fell from 299 to 238. Although the long-short position ratio of large-scale accounts further tilted toward the long side, this was mainly because the total amount of short positions in such accounts was too limited. The substantial reduction in long positions in the latest statistical period could not be ignored. Such accounts showed a certain bearish attitude, and whether this long-term reduction would continue to be maintained was also worthy of continued attention.

In terms of retail positions, long positions fell from 1913 to 1615, a new low in nearly 65 weeks, and short positions fell from 888 to 815. Retail investors reduced their long and short positions simultaneously in the latest statistical period. Currently, long positions have fallen to a new low since early April last year, which is rare for a long-term optimistic account. The relatively weak market performance has caused panic to spread faster among retail investors. Although the clear net air conditioning position in the previous weekly report has not been maintained, the adjustment performance in the latest statistical period still expresses a bearish attitude.

CME Micro Bitcoin Futures

The total number of open positions (total open interest) fell from 28,720 to 15,481 in the latest data, hitting a new low in nearly a month. Whether the sharp rise and fall in the total number of micro Bitcoin contracts will become the "norm" has become another continuous focus of the data.

From the perspective of itemized data, the largest dealer's long position fell from 214 to 0, and the short position fell sharply from 1,273 to 124, and the long and short (hedged) positions remained unchanged at 0. In the latest statistical period, dealer accounts cleared their long positions while almost clearing their short positions. Considering that the remaining positions are very limited, this position is not worth interpreting.

The long position of asset management institutions decreased from 60 to 0, the short position remained unchanged at 0, and the two-way position also remained unchanged at 0. The positions of asset management institutions were cleared, which also lacked room for interpretation.

In the latest statistical period, the long positions of leveraged fund accounts decreased from 9516 to 8095, the short positions increased from 10915 to 12974, and the two-way positions dropped from 10379 to 677. The hedged positions of leveraged funds have been basically cleared in the latest statistical period, but considering that such accounts have made clear net cold positions, the impact of this sharp decline in "participation" has been weakened, especially when such accounts do not express a clear unilateral tendency in standard contracts. The short-term attitude revealed by such accounts in micro contracts is more valuable for reference. Therefore, it can be considered that the thinking of such accounts is similar to that of retail investors, standing on the opposite side of large institutions.

In terms of large-scale positions, long positions fell from 2,570 to 2,128, short positions dropped from 4,988 to 652, and two-way positions rose from 112 to 135. Large-scale accounts reduced their long and short positions simultaneously during the latest statistical period, but the reduction in short positions was very impressive, and directly led to the overall position of such accounts turning from net short to net long. This change in net position is actually a more effective unilateral tendency signal. Compared with the relatively weak short expression in standard contracts, the long information in micro contracts is more clearly expressed. Large-scale accounts also stand on the long side of large institutions in the short term.

In terms of retail positions, long positions fell from 5869 to 4446, and short positions fell from 1053 to 919. Retail investors carried out relatively mild long and short dual-way simultaneous reductions in the latest statistical period, and the reduction in long positions was also slightly larger, and the proportion of long and short positions fell further than that of long positions. Therefore, it can be considered that retail investors expressed a bearish attitude in both types of Bitcoin contracts, and are in the same camp as leveraged funds.

CME Ethereum Futures

During the latest statistical period, Ethereum's performance was basically the same as Bitcoin's. Although the price rebounded slightly, it is still a long way from recovering the previous losses.

The total number of open positions (total open positions) fell from 2,896 to 2,733 in the latest data. This value has fallen for the third consecutive week and has now fallen to a nearly seven-week low. The previous rise in popularity against Bitcoin has come to an end, and it has basically returned to a state of synchronization with Bitcoin.

From the perspective of sub-item data, the largest dealer’s long position increased from 53 to 59, the short position increased from 78 to 88, and the long and short (hedged) positions increased from 33 to 43. The dealer account once again increased its positions in all directions. Although the increase in the latest statistical period is still very limited, the upward trend of participation in Ethereum contracts has been maintained. How long this trend can continue is worth continued attention.

The long positions held by asset management institutions remained unchanged at 0, the short positions decreased from 126 to 81, and the two-way positions remained unchanged at 0. Asset management institutions have not covered their long positions and hedged positions before, and reduced their short positions in the latest statistical period, showing a bullish attitude in the short term, which can be regarded as a continuation of the "habit" of such accounts to have similar attitudes towards Bitcoin and Ethereum. However, due to the limited positions, it is not recommended to over-interpret.

In the latest statistical period, the long position of leveraged fund accounts decreased from 1,174 to 1,136, the short position decreased from 2,217 to 2,087, and the two-way position decreased from 54 to 28. Leveraged funds once again reduced their long and short positions simultaneously in the latest statistical period, but since the adjustment range was very limited, there is no room for too much interpretation.

In terms of large-scale positions, long positions further decreased from 477 to 333, a new low in nearly 8 weeks, short positions decreased from 78 to 62, and two-way positions increased from 0 to 27. Large-scale accounts reduced their long and short positions simultaneously in the latest statistical period, and the net air conditioning position idea in the previous statistical period was not continued. Such accounts are not very clear about the future trend of Ethereum, and can only be considered to have carried out risk control in a relatively flat market.

In terms of retail positions, long positions increased slightly from 1105 to 1107, and short positions increased slightly from 310 to 317. The adjustment of retail positions in the latest statistical period can be basically ignored, but compared with other types of accounts, retail investors are more optimistic about Ethereum, but because the increase in positions is too small, it is not recommended to make an overly strong bullish interpretation.