BTC Commitment of Traders (COT) report stills shows signs of dealer negativity and declining retail sentiment.
Obviously, this can all change on a dime.
I don't plan trades on COT alone. However, what COT is good for is understand where market participants stand and what 'knock-on' effects may eventuate when market's reverse or when trend continuation occurs. Specifically,
- if the market is caught net short, any impulse to rally the market (BTC in this case), can squeeze higher before continuing,
- if the market is net short and biased in that way, Calls may be cheap relative to puts (so there may be an opportunity here to buy time usefully),
- Understand the 'mind of the market' which is often wrong and miss-timed - so may be a useful contrary indicator.
Recommendation
- check out Cost Basis and Realised PnL to understand whether new money is flowing into the market (at lower prices)
- keep an eye on any sudden changes of COT, particularly to the opposite direction, particularly where a market stalls and finds support (a good buy!)
- news and 'tweet' effects including ' potential squeeze risk!
Good Trading :)
Obviously, this can all change on a dime.
I don't plan trades on COT alone. However, what COT is good for is understand where market participants stand and what 'knock-on' effects may eventuate when market's reverse or when trend continuation occurs. Specifically,
- if the market is caught net short, any impulse to rally the market (BTC in this case), can squeeze higher before continuing,
- if the market is net short and biased in that way, Calls may be cheap relative to puts (so there may be an opportunity here to buy time usefully),
- Understand the 'mind of the market' which is often wrong and miss-timed - so may be a useful contrary indicator.
Recommendation
- check out Cost Basis and Realised PnL to understand whether new money is flowing into the market (at lower prices)
- keep an eye on any sudden changes of COT, particularly to the opposite direction, particularly where a market stalls and finds support (a good buy!)
- news and 'tweet' effects including ' potential squeeze risk!
Good Trading :)
