Bitcoin (BTC) is showing signs of a potential rebound as CME futures speculators, often dubbed ‘smart money,’ have significantly reduced their bearish bets over the past month. This shift in sentiment is reminiscent of previous market bottoms and could herald a substantial price recovery in the coming weeks.
According to the latest Commitment of Traders (COT) report from the Commodity Futures Trading Commission (CFTC), non-commercial Bitcoin futures traders have cut their net short position from about +1,000 contracts a month ago to roughly -1,600 contracts. This indicates that large speculators, including hedge funds and financial institutions, have pivoted from being net short to net long, with bulls now outnumbering bears on the CME.
A Historical Pattern Repeats
Analyst Tom McClellan points to two similar sentiment shifts in the past that preceded significant Bitcoin price rallies. In April 2025, a sharp reduction in CME Bitcoin futures net shorts was followed by a 70% price increase. Similarly, in 2023, a similar market condition led to a 190% price gain.
“The rapid net-short unwind implies that ‘smart money’ added longs with some urgency,” McClellan noted, highlighting the importance of these shifts as potential indicators of market bottoms.
Technical Indicators and Market Floors
Currently, Bitcoin is defending its 200-week exponential moving average (200-week EMA), which is around $68,350. Historically, this moving average has acted as a bear-market floor during major drawdowns over the past decade. The last times Bitcoin traded around this level during deep sell-offs—in 2015, 2018, and 2020—marked the end of downtrends and the beginning of new recovery phases.
The weekly relative strength index (RSI) for Bitcoin remains in oversold territory, suggesting that selling pressure is nearing exhaustion. This further raises the odds of a recovery in the coming weeks. A decisive rebound from the 200-week EMA could trigger a run-up toward the 100-week EMA, which is currently around $85,000.
Cautionary Notes
However, McClellan cautions that the smart money shift is a condition, not a signal, meaning Bitcoin could still experience a price dip before forming a durable low. For instance, in 2022, BTC plunged by over 40% after breaking below its 200-week EMA, despite similar oversold conditions. A repeat of this scenario in 2026 could see Bitcoin prices falling toward $40,000, a 60% drop from its record high of around $126,270.
Some analysts, including Kaiko, also predict that Bitcoin could bottom out around the $40,000 to $50,000 range based on its four-year cycle framework. This suggests that while the conditions are favorable for a rebound, investors should remain cautious and prepared for potential volatility.
Looking Ahead
The current market dynamics and historical patterns suggest that Bitcoin is poised for a significant recovery. However, the path to $85,000 may not be straightforward. Investors should monitor the 200-week EMA and other key technical indicators closely. As always, the cryptocurrency market remains highly unpredictable, and it is crucial to conduct thorough research and consider the risks involved.
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