Ki Young Ju, founder and CEO of CryptoQuant, announced on August 10 that leveraged hedge funds on the CME have shifted from net short to net long in Bitcoin futures. For years, these funds maintained a consistently short position not because of bearish sentiment, but as part of the basis trade, an arbitrage strategy involving buying spot while shorting futures. The profitability of this trade has declined as spot and futures prices converge, prompting these funds to abandon the strategy in favor of directional bullish positions. This reorientation increases liquidation risk in case of adverse price moves, but can also amplify rallies when remaining short positions cover. Whether this positioning persists across multiple reporting periods will determine if it represents a sustained trend or mere market noise.
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