Upside Calling? Bearish Bets on Bitcoin Futures Hit Record Low

The bearish sentiment in the bitcoin (BTC) futures market hit a record low last week, indicating that the worst of the leading cryptocurrency’s price plunge just might be in the past. The non-commercial futures contracts of bitcoin, traded by large speculators and hedge funds, totaled a net position of -1266 contracts in the week ended Aug. 21 – the lowest on record, according to the data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The futures data indicates that the speculators are the least bearish on BTC since the futures were first listed back in December. A negative total represents net short positions (bearish bets) and a positive tally indicates net long positions (bullish bets).

The sharp drop in the bearish sentiment, as represented by the steady decline in the net short positions from the high of -1945 seen ten weeks ago to -1266, adds credence to the signs of bearish exhaustion indicated by BTC’s defense of $6,000 since mid-June.

The bearish net positions in the bitcoin futures markets hit a record low last week, validating the argument put forward by the technical charts that the cryptocurrency has likely bottomed out around $6,000.

A break above $6,800 (psychological resistance) would bolster the already bullish technical setup and would open the doors to $7,000.

A move below the ascending trendline seen in the 4-hour chart would weaken the bullish case and could yield a drop to $6,230 (Aug. 20 low).