Institutional Traders Shift from Bearish to Bullish on Bitcoin

The institutional trader sentiment on Bitcoin has shifted from bearish to bullish in recent weeks. According to the Commodity Futures Trading Commission (CFTC) data, large reportable traders on CME are now modestly net long in Bitcoin futures, with a combined position of roughly 1,900 BTC across standard and Micro contracts.

This marks a significant change from earlier this year when these traders held a net short position. The shift is attributed to hedge funds reducing their shorts and ETF inflows recovering. In fact, US spot Bitcoin ETFs recorded five consecutive days of inflows from August 3 through August 7, attracting about $865 million.

While the aggregate CME net-long position remains small, analysts say that the shifts suggest institutions may be positioning around a potential Bitcoin bottom. However, Glassnode struck a cautious tone, stating that stronger ETF demand or an upside volatility breakout would be needed to confirm this shift.