Bitcoin Smart Money Sentiment 8/25/18 – Smart Money Sentiment Near All-Time Highs Again, Despite SEC ETF Rejections
This past week the United States Securities and Exchange Commission (SEC) rejected nine more bitcoin exchange traded funds (ETFs) from ProShares, GraniteShares and Direxion. These funds intended to base their data on CBOE and CME bitcoin futures market. However, the SEC feels there is still a lack of protection against fraud and manipulation to merit an exchange traded fund or product and that the bitcoin futures markets are still small. In other words, although the bitcoin futures markets are regulated, someone or some entity with deep pockets can still manipulate them because they are small relative to other futures markets.
“... the Commission is disapproving this proposed rule change because, as discussed below, the Exchange has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement that a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.”
The the last time the SEC rejected a cryptocurrency ETF was the Winklevoss' ETF back in July and the market sold off by $2000.
This time around, price actually went up a bit.
Some might say the ETF rejections were already reflected in the price of bitcoin, but I think it because the smart money sentiment is improving.
The Commitments of Traders (COT) is a weekly market report issued by the Commodity Futures Trading Commission (CFTC) listing the positions held by commercial traders and the “Smart Money”, the hedge funds and bank institutions in various futures markets in the United States. Since the COT measures the net long and short positions held by speculative traders and commercial traders, it is a great resource to gauge sentiment in the Markets.
Exhibit 1 - Smart Money's net position has decreased over the last several weeks.
Exhibit 2 - Smart Money sentiment is near all-time highs again.
Exhibit 3 - Smart Money sentiment summary
In a previous post,
I mentioned if price was going to go higher, four things need to happen for me to take Bitcoin seriously again:
1 Price need to close above the more recent wick on the daily candle.[CHECK]
2 Price needs to close above the 21 EMA on the daily candle. [CHECK]
3 Price needs to take out the resistance at $6800 on a daily candle.
4 MOST IMPORTANTLY, price needs to take out the sellers at $7075.
If #3 and #4 get checked off in the coming weeks, the next target becomes $7600.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
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by rollandthomas
Interesting that the amount of shorts on Bitfinex and Bitmex are near record highs going into the weekend so potential for a squeeze is present.
The most recent data is from Tues, which was posted on Friday, so it will be interesting to see what the #s are next Friday.
Nice analysis, thank you for the insight.
Thanks @pwny
$7,100 will be difficult to take out. If MM try a short squeeze at this level, it could cause sidelined retail to get in which could trigger at least a mini bull run. The said, I’m thinking they may hold price up just below $7,000, hoping retail gets out of their shorts. Then look out below. Very interesting to watch this market. You’ve got to love crypto.
Thank you for the updates. Glad to peer you posting again.