Bitcoin futures positioning among non-commercial traders is swinging sharply 
toward net long exposure, a move technical analyst Tom McClellan (editor of 
The McClellan Market Report) says has arrived “with some urgency” in the 
latest weekly Commitment of Traders (COT) report and one that has coincided 
with notable market outcomes in prior, similarly extreme episodes. Sharing a 
chart of Bitcoin futures (price on a log scale) alongside non-commercial net 
positioning, McClellan argued that in Bitcoin’s case, large speculators 
effectively function as the “smart money” cohort, because the market lacks the 
typical commercial hedger presence seen in traditional commodity futures. “The 
non-commercial traders of Bitcoin futures are usually the smart money,” 
McClellan wrote. “This week’s COT Report shows that they are moving net long 
with some urgency. Look back at what the last two similar excursions led to. 
But remember, this is ‘a condition, not a signal’.” Why Non-Commercials Matter 
In Bitcoin Futures McClellan later expanded on how he frames the CFTC’s weekly 
report, which breaks futures positioning into commercials, non-commercials, 
and non-reportables. In corn, for example, commercials might be producers or 
end users; in Bitcoin, he says that category is thin. “In Bitcoin, there are 
hardly any traders who qualify as Commercial traders,” McClellan wrote. “So in 
an unusual circumstance, the Non-commercial traders fill the role of being the 
smart money.” Related Reading: Bitcoin Extreme Fear Streak Extends To 22 Days 
As Price Struggles That distinction matters because COT is not about absolute 
long or short interest, every futures contract has a long and a short by 
definition, but about who is on each side. “Every futures contract is 
simultaneously one long and one short position, held by different parties. So 
the number of longs will always equal the number of shorts,” he wrote. “What 
matters is who holds the positions.” McClellan also cautioned against 
importing equity-market intuition about short interest into futures 
positioning. “So a large short position in a stock represents potential energy 
which could get converted into price movements via short covering,” he wrote. 
“COT data don’t do that. They just represent expert opinion.” The core dispute 
in the X thread wasn’t whether COT can be useful, but how to interpret timing. 
Trader toni (@tonitrades_) agreed the dataset has value but questioned whether 
futures positioning simply follows spot momentum. “COT data has historically 
been a solid indicator, no argument there,” toni wrote. “But non-commercial 
positioning often lags spot market moves by weeks. By the time futures traders 
pile in, the initial momentum is usually priced in already.” Related Reading: 
Bitcoin Bottom Call On Ice: Fear Is Extreme, Whales Aren’t Buying McClellan 
pushed back on that sequencing. “I think you meant that their positioning 
PRECEDES price moves sometimes by weeks,” he replied, underscoring his view 
that positioning extremes can show up ahead of meaningful market moves, though 
not on a predictable schedule. That’s where the thread landed: with an 
emphasis on uncertainty. Jim Osman (@EdgeCGroup) summed it up succinctly: 
“Timing still uncertain.” McClellan agreed. “Exactly, hence my admonition.” In 
his longer explanation, McClellan reiterated that most weeks the COT report 
has no actionable message, but that extremes can be informative with a crucial 
caveat. “A lot of the time there is no useful message in the COT data for each 
futures contract,” he wrote. “But when an extreme develops like now in 
Bitcoin, then we can get useful information. But as with any overbought or 
oversold reading on any indicator, COT data only reflect a ‘condition’ not a 
signal. The data will not tell you when that condition is going to matter, 
only that it should matter, sometime.” At press time, BTC traded at $65,663. 
Featured image created with DALL.E, chart from TradingView.com

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