Key Takeaways
Why is a fund making a contrarian wager towards CT sentiment?
There have been previous situations the place CT’s weak sentiment was a BTC counter-signal.
What’s the present market positioning?
There’s creeping demand exhaustion as gamers hedge as an alternative of chasing BTC recoveries.
Crypto Twitter (CT) could also be overblowing the present market fears on Bitcoin [BTC] following the current leverage flush.
In line with Quinn Thompson, CIO of macro-focused hedge fund Lekker Capital, the present setup might result in an explosive rally like final November’s run.
“Present setup for BTC and ETH is uncommon – largest positioning rinse in historical past of crypto whereas standing on doorstep of macro goldilocks…Alternative forward is much like pre-Trump victory ’24.”
Supply: X
The catalyst? The so-called “macro goldilocks” or upcoming Fed easing cycle, which might prolong to early Q1 2026. Per Thompson, the anticipated liquidity surge might gasoline the BTC rally.
Is it time to lengthy Bitcoin or take the sidelines?
In reality, Thompson added that the CT consensus has been mistaken up to now, and the present bearish inclination may very well be mistaken too. Unsurprisingly, even Santiment’s Social Dominance(FOMO) barely agreed with him.
Normally, as FOMO rises, it usually culminates in an area prime for BTC. Whereas extraordinarily weak sentiment generally coincided with native worth bottoms.
Supply: Santiment
One other knowledge set, Purchase/Promote Strain Delta, which tracks market extremes for finest entries and exits, aligned with Thompson’s views. The indicator was near flipping crimson (backside or vendor exhaustion), according to on-chain analyst Joao Wedson.
Supply: Alphractal
ETF flows nonetheless risk-off
Regardless of the optimistic outlook, nonetheless, the Spot ETF Inflows have been fluctuating, and the long-term holders [LTH] continued to sell.
On the twenty second of October, Spot BTC ETFs recorded a Every day Internet Outflow of $101 million. Since mid-October, ETF traders have been risk-off with notable outflows.
Supply: SoSo Worth
The current pullback was now beneath the Quick-Time period Realized Value of $113K which signalled “demand exhaustion” per Glassnode. The analytics agency added,
“This structural fatigue means that the community may have an extended consolidation section to rebuild confidence and take up the spent provide.”
In reality, Glassnode added that the current tried restoration was met with elevated hedging for a draw back safety for $105K worth goal.
Supply: Glassnode
Total, CT’s sentiment and market positioning urged merchants had been cautious within the short-term.
Maybe, they’re eyeing the macro entrance to completely resolve to constructive earlier than flipping bullish once more. However to Thompson, the weak sentiment may very well be the signal to go all in.
