The article analyses the bullish alignment between smart money positioning and the Elliott Wave theory, predicting Bitcoin could reach $166,000 in the coming months. Using various analytical methods, including the Commitment of Traders reports, it supports a rise in Bitcoin’s price while emphasising the importance of staying above $69,000.
The current positioning of “smart money” and the Elliott Wave analysis suggest a bullish outlook for Bitcoin, predicting a target price of $166,000 in the upcoming months. Previous analysis indicated that a 98- to 112-day lag in Global M2 Money Supply (GMS) aligns well with Bitcoin’s price movements, forecasting a rally from May through August, substantiated by the Elliott Wave Principle.
Employing a unique weight-of-evidence approach, we complement the Elliott Wave with insights from the Commitment of Traders (COT) reports released weekly by the Commodity Futures Trading Commission (CFTC). These reports are invaluable for understanding how experienced traders—termed “smart money”—are positioning themselves, offering insights beyond what typical investors may discern.
Recent insights from Tom McClellan of McClellan Financial Publications indicate non-commercial traders are currently the most net-long on Bitcoin since September 2023. In contrast to other markets, commercial traders play a minimal role in Bitcoin futures; thus, non-commercial traders represent the smart money. This insight, combined with our GMS data, reinforces our positive expectation for Bitcoin.
In September 2023, there was a notable net-long position from non-commercial traders that coincided with a significant rally initiating a third wave upward. Additionally, these traders held a considerable net short position prior to the November 2024 elections, which preceded a correction of roughly 33% over three months. However, it is essential to acknowledge that it can take time for such positions to yield results, and hence do not provide precise timings for market movements. Our multi-dimensional methodology enhances the reliability of our forecasts, showing additional evidence supporting a price rally, as long as Bitcoin remains above $69,000.
