The year began with high hopes following the code-friendly election of the US president, raising hopes for relaxation of regulations. Bitcoin hit a record $109,300 in the first quarter of the year. However, macroeconomic pressures quickly became a central stage. The cryptocurrency retreated to around $85,000.
Currently, CME Bitcoin Futures positions suggest a changing landscape as it appears that one cohort of traders is trimming the position.
Asset Managers Reduce Bitcoin Exposure
Cryptoquant’s latest analysis of CME Bitcoin futures has shown significant changes in market positioning. In fact, we found that asset managers and other participants exhibited divergent behavior.
The asset manager peaked at a net long position of $6 billion around the second half of 2024, but has since reduced exposure to around $2.5 billion. This indicated that they were either making a profit or taking risks following a strong gathering.
Meanwhile, the “other” category, including retail investors and small institutions, has seen a sharp increase in net long positions. This figure is now at around $1.5 billion, the highest level in more than a year.
This surge suggests new bullish sentiment from players in non-institutional markets. Divergence between these two groups can indicate a change in market dynamics, with professional capital receding and sometimes observed in late stage market cycles, with retail and small entities increasing exposure.
Interestingly, despite institutional attention, a more optimistic shift has occurred, particularly in social media.
Social chat
According to Santiment’s latest analysis, crowd sentiment on social media is bullish, especially towards Bitcoin, coinciding with repeated cryptocurrency flirtation at a $85,000 resistance level. The data shared by Crypto Analytic Platform highlights the shift to a “bullying zone,” where social media posts show significantly more optimism than negativity.
As many players are currently focusing on potential rally to $90,000, this rise in social chatter suggests an increase in trader confidence. However, further profits may depend on macroeconomic development. Macroeconomic developments include tariff discussions over the next few days and broader global economic indicators.
