Smart money buying cheap bitcoin silent
In this video we're going to talk about some very interesting and fascinating information which I'm going to share with you and you're going to learn a lot from this particular video. Let me just say that now. Before we start going into that, I just want to do a quick recap, especially for those of you who are watching this video is for the first time you say, we'd been long on bitcoin.
We'd been bullish and long and bitcoin from about these lows. We've said now for some weeks you can go ahead and watch a previous video is about that, that there's a very strong likelihood. We said that bitcoin would hold these levels and I would start a rally higher. That is exactly what bitcoin has done so far. Now here's an interesting question I want to ask you.
Who Do you think has been on the wrong set of Bitcoin for the last few weeks? Well, the answer might actually shock you. You see, take a look at this.
This is the hot report where the commitment of traders’ report, which comes directly from the CEO of the Chicago Board of exchange, so what you're seeing here is exactly what the big and small traders and financial institutions and hedge funds are doing on bitcoin. What you're seeing is exactly what positions they're taking and how they're committing their money to Bitcoin, and this makes this report very important and I'm going to show you how we interpret this particular report because many people interpreted wrong.
So take a look at this and you'll see here in red are the non-commercials, the non-commercial traders also called the large speculators as well. Now over here are the commercials and now the commercials that are also sometimes refer to as a smart money with the insiders.
And over here in the purple, these are the small speculators. OK, so we don't really pay attention to what's going on over here on the ride, but over here we want to pay attention to, and I'm going to show you how we interpret this now according to invest a pto and good definition of non-commercial trader is this. It says that the category of non-commercial trader includes individual investors, hedge funds, and some large financial institutions. If non-commercial, traders, for example, speculators, if they have a substantial number of short positions, it can be inferred that this group of investors believes that the price of the underlying asset is going to decrease. OK?
Now, one particular mistake that almost everybody makes, including many books and websites online is they keep referring to the non-commercial trader as a smart money or they keep saying that the non-commercial trader is the most important piece of information in the cot report.
In other words, the mistake which many people tend to make is they seem to think that this is the most important bit of information in the report. It's not. If anything, these guys here, the non-commercials, the hedge funds, they are on the wrong side of the market. Especially when the market reverses and turns your say, here's what's going on. The non-commercials, the hedge funds, they are usually trading trends. Now, there's nothing wrong with trading trends. The problem is this, that they may be good at trading trends, that they're absolutely terrible when it comes to reversals. You'll see what really bad at the non-commercials is when something like this happens. OK, so they keep thinking the trend is just going to continue, so when the market's only turns against them, they're absolutely terrible in those situations and those are the people we least want to follow.
The same thing applies in reverse, so right now they're thinking that the trend in Bitcoin is still to the downside. So the non-commercials they would trade the trend on the downside. That's bitcoin has been trending lower, but here's the problem. When the trend reverses as a trend usually does eventually reverse. They're absolutely terrible when it comes to dos trend reversals. In fact, let's take a look and I'll show you. Here is the most recent bitcoin com report. Again, this is the commitment of trader’s report from the Chicago Board of exchange and let's take a look exactly what the non-commercials, the hedge funds and the banks are doing here. And look at that. You will see that while they have 3000, 193 long contracts on Bitcoin, but they have 5,000 over 5,000 short contracts here on Bitcoin, so if you subtract one from the other, this means that non-commercial the hedge funds, they are net short on bitcoin.
That of course would have been a disaster for them. And by the way, in case you're thinking, well, hang on a second. Hedge fund supposed to be smart, aren't they supposed to be on the right side of the market? Take a look at this. This is the front cover of Bloomberg Business Week magazine a few years ago, and guys, let me say this is absolutely true. This is actually the front cover they published about hedge funds and here's what they're saying. You'll see that they're saying that the perception of hedge funds by most people is shown to you by this green Phallus that drawn here. So most people think that hedge funds must be this amazingly smart institutions and other outperforming the market. Their reality is actually this drooping thought us. They've drawn here. As you can see, in fact, most hedge funds are under performing the market, they're doing worse than the market, and that front cover speaks volumes about hedge funds guys, and that's why I'm bringing this to your attention.
You see the books and the websites that say that non-commercials are the people who should be paying attention to wrong, wrong and wrong. Again, these guys have been on the wrong set of Bitcoin for weeks, and not only that, you'll see that in fact, they realized their mistake. Take a look, for example, at this orange section here, this orange section is telling you what they're doing recently, what they've changed from the last report, uh, changes and commitments from April 17th. And you can see that they have actually reduced their short exposure, but not by much, OK? But nonetheless, some of these people are realizing they're making mistakes here. Now, as an example, let me show you what they're doing right now on the euro currency. Now, in case you're not aware, the euro currency has been plunging. It's been getting slaughtered for the last few weeks. In fact, this is something we've been expecting for many weeks in our own leading shredder premium membership.
We've been saying for weeks and months now that this particular pattern, this particular market is going to drop and the reason why we've been saying and just because we've been paying attention to the commercials, take a look. So let's compare what the non-commercials are doing with the commercials. OK, now the non-commercials, the hedge funds that can look at the long contracts, so they would. They are 211,000 contracts log on euro whereas only 86,000 shorts. So that means their net long, they'd been bullish on the euro. Now let's compare that with the commercials. They're real smart money here. The commercials they are binge could just compare the short versus long so you can see 219 long positions versus the 369,000 short positions. So if you subtract one from the other, these guys are net short and they have been net short for a very long time.
All right, so these guys over here, the commercials are the people we pay attention to, not the hedge funds which are using the wrong side of the market. All right, especially at the reversals, especially when the market turns and if you take a look over here, these guys, the hedge funds, the poor schmucks, I mean these guys now realized that they'd made a mistake and now you can see they're reducing their long exposure. You can see minus 22,000, they reduced their long exposure to the euro from the last week. So going back to our Bitcoin, a cot report here again, remember that the cot report does not provide any commercial data for bitcoin a, which is a bit of a shame, but again, even looking at what non-commercial they're doing here and looking at the price of Bitcoin, we can have a pretty good guess at what the smart money is doing right now.
And again, if you've been following our videos, you probably know that we've been in bitcoin for many weeks now since the market came down to these lows. And guys, if you liked this video and found it helpful, please give it a thumbs up and please remember to subscribe to our videos for future updates as well.
Thank you very much. And then see in the next video.