The base gap narrowed and shorting ended: CME (CME.US) funds rarely increased

According to Woofun AI, the CME (CME.US) hedge fund position structure underwent a rare reversal, from long-term shorting to net longing. CryptoQuant CEO Ki Young Ju pointed out that this shift marks professional traders betting on Bitcoin's upward potential and completely changing the market pattern dominated by margin trading in the past.

The underlying reason lies in the failure of traditional market-neutral strategies. For a long time, leveraged funds executed margin trading by buying Bitcoin spot or ETFs and selling futures contracts, and relied on futures premiums to reduce profits, causing CME.US futures positions to remain negative all year round. However, as the premium gradually shrinks, the basis for this structural shorting position is disintegrating, forcing institutions to re-evaluate their position allocations.

Judging from economic accounts, the attractiveness of the strategy has declined drastically. According to data compiled by Woofun AI, the current three-month annualized base difference of Bitcoin futures is only about 3%, which is lower than the yield of 3.8% on two-year US Treasury bonds. Against the backdrop of increased financing, margin, and execution risks, after hitting a low of $58,000 on July 1, the Bitcoin price rebounded above $65,000, further weakening the motivation to maintain short positions.

Fundamental changes in the position structure have sent a strong signal that institutions are bullish. As spread traders liquidate short positions, long positions of CME (CME.US) leveraged funds have now surpassed short positions, and an overall net long position has been established. This is a key indicator that market sentiment turned optimistic following the narrowing of the base, which indicates that Bitcoin's rebound may receive more solid institutional support.