Cue the conspiracy theories!
According to the Block, hedge funds were inordinately short CME bitcoin futures compared to their peers the past week. So much so that net short positions among the hedge funds trading the product were at an all-time high the past two weeks.
This, the Block’s Ryan Todd says, is somewhat significant given the mood throughout the second quarter of 2019:
“This is notable as throughout 2Q19, hedge funds have been relatively net neutral, while asset managers and non-reportable traders skew heavily long (>80%); while Other traders have been net short (most likely operating in a dealer/sell-side capacity in making markets?).”
As the site notes however, this doesn’t mean there was a massive bet against bitcoin coming into the crash. These shorts could simply be hedges for their longs.
If it was, however:
“…bitcoin was trading down 19.55% from $8,806 on November 12 at around $7,085 on Sunday. If those funds closed their position, that would have left them with some profits from the dip.”