COT Notes
- COT stands for Commitment of Traders
- COT reports come out on Friday, representing positions held as of the close on the previous Tuesday
- There are two sets of COT reports, legacy reports and newer disaggregated reports with more information.
I picked up the above chart from this Tweet.
The chart only shows one point of view, and not completely at that.
COTBase provides a limited number of free charts so let’s look there for more information.
Bitcoin CME Futures CotBase
CME Bitcoin futures positioning from COTBase
The numbers from COTBase foot, netting to zero, which they must.
The numbers foot, but they do not remotely match the lead chart.
That’s because COTBase reflects legacy reporting and the lead chart represents disaggregated reporting.
However, the lead chart inaccurately uses legacy terms.
Current COT Data
To further add to the confusion, one also needs to consider there are two Bitcoin contracts. The large contract is for 5 bitcoins and the smaller contract represents 0.1 bitcoin.
The true picture nets both contracts. Fortunately, the volume of the small contract, while seemingly large in number, only has a very minor impact because of the relative weights.
Disaggregated COT Terms
- Dealer Intermediary
- Asset Manager / Institutional
- Leveraged Funds
- Other Reportables
- Nonreportable positions
The lead chart says “Non-commercials’ Weekly Net Position” a legacy term but matches the net disaggregated COT report “Asset Manager / Institutional”
Legacy vs Disaggregated COT Report Snips
CTFC COT Bitcoin Snips From Above Links
This seems to match the green bars (Left Scale in 000s’) in the lead chart. This took me while to figure out because the term in the lead charts is wrong.
COTbase only has a limited number of features for free, and just the legacy style reports.
Barchart.Com does not seem to have the large Bitcoin contract, only the mini contract.
Scroll to Continue
I did another search today looking for better COT charts and discovered Tradingster.
Bitcoin Disaggregated COT
Bitcoin Disaggregated COT courtesy of Tradingster
That chart presents a completely different view than the lead chart. The site is nicely interactive with lots of data.
Chart Notes
- Asset Manager / Institutional are net long 4,820 contracts
- Leveraged Funds are short 5,133 contracts
- Total open interest is 11,729 contracts, a new record.
The leveraged funds have not always been correct. They were hugely short in that early 2021 runup.
Here’s the Bet in US Dollar Terms
- Asset Managers Long: 4,820 * roughly $30,000 = $144,600,000
- Leveraged Funds Short: 5,133 * roughly $30,000 = $153,990,000
- Total Open Interest is 11,729 * roughly 30,000 = $352,170,000
How much of these bets are is hedged is a mystery.
If only the dealers are hedged, then there is a big potential for a spectacular move.
Imagine a whale having a big short position ready to dump futures at the opportune time straight into a plunging market.
What’s Become of Bitcoin?
It’s Asset Managers vs Leveraged Funds with record or near-record bets each way.
Yet, Bitcoiners generally believe this is about a US dollar replacement, about David (El Salvador) vs Goliath (Central Bankers) and about the meaningless ability to send bitcoin easily to Timbuctoo.
What a Hoot!
Fundamentally and Technically Speaking
As always, the price is what the marginal buyer is willing (or perhaps forced to pay). Now, the marginal buyer/seller is likely to be leveraged hedge funds.
This post originated at MishTalk.Com.
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