Hedge funds reduced their net bearish exposure to Bitcoin futures during a week in which the cryptocurrency fell toward $80,000, according to data from the Commodity Futures Trading Commission (CFTC) cited by CryptoSlate. The move suggests leveraged traders were scaling back outright directional bets even as broader market pressure intensified.
CFTC figures showed leveraged funds held net short positions equivalent to 30,611 BTC on Oct. 13, down from 35,903 BTC a week earlier. That represented a reduction of 5,292 BTC, or nearly 15%, during a reporting period in which Bitcoin declined from roughly $85,600 on Oct. 6 to about $83,100 on Oct. 13.
The retreat in bearish positioning came as Bitcoin faced pressure from higher Treasury yields, weaker institutional demand and a selloff in global technology shares. The cryptocurrency briefly dropped below $81,000 during the period, increasing the risks for traders using leverage and prompting some bearish positions to be closed or reduced.
Short positions fell faster than longs
The CFTC data showed that outright short positions dropped by 6,437 BTC to 59,458 BTC. Outright long positions also declined, but by a smaller 1,145 BTC, leaving 28,847 BTC in long exposure.
As a result, the gap between bearish and bullish directional positions narrowed. Even after the adjustment, however, leveraged funds held more than twice as much outright short exposure as long exposure.
Bitcoin’s decline became more pronounced on Oct. 7, when Treasury yields approached 5.3% and expectations of further Federal Reserve tightening weighed on speculative assets. Elevated oil prices added to concerns about persistent inflation, while higher bond yields made interest-bearing assets comparatively more attractive.
Bitcoin fell below $81,000 on Oct. 8, extending a retreat from levels near $87,000 earlier in the month. The decline also came as demand through US-listed Bitcoin exchange-traded funds weakened, casting doubt on the strength of the cryptocurrency’s late-September recovery.
Market volatility increased again on Oct. 13 after a sharp decline in South Korean semiconductor stocks spread through Asian equities. The KOSPI fell about 5.5%, while Samsung Electronics and SK Hynix suffered heavy losses amid concerns surrounding the financing and profitability of artificial-intelligence investments.
The equity selloff coincided with approximately $813 million in cryptocurrency liquidations over 24 hours. Bullish positions accounted for $686.72 million of that total. Bitcoin briefly moved below $81,000 before recovering above $83,000, adding to the uncertainty for traders holding large leveraged positions.
Traders shifted toward spread strategies
Although leveraged funds reduced outright bearish positions, they increased futures positions designed to offset long and short exposures against each other. CFTC data showed spreading positions rose by 2,719 BTC-equivalent per leg to approximately 8,434 BTC, an increase of nearly 48% in the reporting week.
A spread strategy can involve buying a Bitcoin futures contract for one expiration date while selling another contract with a different maturity. Rather than relying entirely on Bitcoin’s direction, the trader seeks to benefit from differences in futures pricing while limiting some directional exposure.
The increase in spreads lifted gross long exposure by 1,574 BTC to about 37,281 BTC, even though outright bullish positions declined. Gross short exposure fell by 3,718 BTC to 67,891 BTC, with the greater use of offsetting positions partly affecting the overall figures.
Participation in CME Bitcoin futures also contracted. Combined open interest in standard and micro Bitcoin contracts fell by approximately 3,567 BTC-equivalent, or 3.2%, over the week. Taken together, the numbers point to a reduction in outright market exposure and a greater emphasis on positions that are less dependent on a single price direction.
Asset managers followed a different pattern. They held approximately 18,440 BTC-equivalent in net long positions, and their bullish imbalance increased by roughly 547 BTC, mainly because their short holdings declined faster than their long holdings.
Subsequent selling leaves the next positioning report in focus
Bitcoin’s moves after the CFTC snapshot made the positioning picture less clear. On Oct. 14, hotter-than-expected US consumer inflation revived expectations of another Federal Reserve rate increase and pushed Bitcoin below $83,000. The following day, a sharp rise in wholesale inflation sent the cryptocurrency to approximately $79,730 and contributed to $939 million in cryptocurrency liquidations.
Bitcoin later recovered to about $82,800 on Oct. 19, although the market remained vulnerable to additional selling. Glassnode identified a significant concentration of buying interest near $80,000, with the next major support around $78,000 if that level fails.
Because those later price moves occurred after the most recent CFTC positioning snapshot, the data does not yet show whether leveraged funds continued closing short positions or rebuilt bearish exposure during the renewed decline. The next CFTC report, scheduled for Oct. 23 and covering positions as of Oct. 20, is expected to provide the first indication of how those traders responded.
Moneyiar market picture
Moneyiar data at 22:29 on Oct. 19 showed Bitcoin at $82,050.72, up 0.70% over 24 hours but down 0.54% over seven days. Among the other listed assets, Nexus was $0.0000006714, down 6.13% in 24 hours and 17.02% over seven days; Data Network was $0.153335, down 5.99% and 28.25%, respectively; and Walrus was $0.0384821, down 1.44% over 24 hours but up 8.76% over seven days.
