CoinNess.com
Nov 7 · 2 min read

CoinNess Analysis: Individual Investors’ Position Structures Considered As Contrary Indicators

Recently, CoinNesss analysts observe changes on Bitfinex contract positions and share interesting thoughts with investors.

Previous experience suggests that individual investors have similar preferences with those institutional investors in terms of choice of investing time and sometimes even do better than them. However, many of them lack professional skills when predicting the trend, so their position structures are often considered as contrary indicators, a common practice which is supported when analysts observe the position structure of Bitfinex.

Here is a picture that contrasts long/short positions and BTC’s price on a daily basis. The trending line in the green frame explains the inverse relationship between individual positions and BTC’s trending. Since the end of June, long positions (green line) has been moving upward gradually while short positions (orange line) indicates many people reduced their positions, a signal that most traders expected an upward momentum, which never came in the whole July.

The sloping trend showed in the red frame in the picture also proves this. When BTC traded sideways and before it plummeted, short positions had been on the rise while long positions began to subdue. If the former had waited for two weeks, they may have embraced a bull market. But they chose to reduce their positions and thus missed the opportunity.

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