To be a Bitcoin contratian or not?

12 de jul. de 2020

Using a weekly Commitment of Traders report on Forex, you might consider using it as a contrarian indicator. The theory is, of course, that if everyone is net long, where do the new buyers come from.
Here we can see the CME futures contracts for bitcoin.
You can access the raw data via cftc.gov/dea/futures/deacmesf.htm and then Find> 'Bitcoin' on your browser window. It is updates weekly.
Alternatively and much more useful, is getting yourself an account over at QUANDL ( quandl.com/data/CFTC/133741_F_ALL-Commitment-of-Traders-BITCOIN-CME-Futures-Only-133741)

To make use of this data within tradingview, it would be good to learn how to use Pinescript. It's an awesome easy to learn scripting language and if you enjoy making pretty pictures and using indicators and stuff, I reckon you'll enjoy using Pinescript. There is an excellent "Pine Script Mastery" course online which you really should do if you don't know how to code in pinescript. I don't think I'm allowed to link to it (tradingview rules) and am not affiliated, but it has given me so many options and the chap who runs it is really helpful. Just Google it and you'll find it. He also explains in the course how you can link the data in QUANDL to tradingview's Pinescript.

Back to what we have here, the black stepline is the total open interest (as far as asset managers are concerned). The red/ green line is net long positions minus net short positions and gives some degree of sentiment at least of asset managers.

I guess the caution would be, Bitcoin is not Forex, and doesn't behave in a similar economic fashion, since its supply is controlled mathematically and will only decrease predictability and mathematically (rather than in line with a countries own currency in line with that countries' economic needs, i.e to balance prices and jobs)
No indicator is ever 100% and sentiment indicators are certainly no different. It does suggest that institutional interest is picking up.

Remember though, that price is king and bitcoin has been in a downward channel for, well since 16th Dec 2017 (when these futures were launched int he first place). Until we break overhead resistance, it's not likely we'll see upside moved.

Essentially, the safest thing to do here is to stand on the sidelines and wait for some confirmation before entering. Ok, you might miss out on some points, but if we do see an extended bull market incoming, then a few points doesn't really matter in the scheme of things

17 de jul. de 2020

Nota

When asset manager speculators are net short, it seems like a good time to short, and when asset managers are net short, it seems like a good time to long.
Currently, volatility has fallen right off, so we could expect an explosive move some time soon. Play it safe and do what the charts say,... not what you want them to say. To do otherwise, is gambling.

17 de jul. de 2020

Nota

When asset manager speculators are net short, it seems like a good time to [short] - correction ='long'