Leveraged funds reduced their net short position by 5,566.5 bitcoin in bitcoin futures on the Chicago Mercantile Exchange (CME). But asset managers also cut positions during the same period and spot and derivatives market trends diverged, making it difficult to read the move as a clear bullish signal, an analysis said.

CryptoSlate reported on Aug. 2, citing a futures-only report from the U.S. Commodity Futures Trading Commission (CFTC), that leveraged funds’ net short position shrank noticeably from July 21 to 28.

The net position in standard bitcoin futures improved by 1,076 contracts, or 5,380 bitcoin. In micro bitcoin futures, the net position improved by 1,865 contracts, reducing net short exposure by the equivalent of 186.5 bitcoin. CME counts 1 standard futures contract as 5 bitcoin and 1 micro futures contract as 0.1 bitcoin.

But asset managers on the other side also reduced exposure over the same period. Their directional net position weakened by 2,204.3 bitcoin. Standard futures fell by 428 contracts, or 2,140 bitcoin, and micro futures declined by 643 contracts, or 64.3 bitcoin.

A leveraged fund’s short position can be a simple bet on falling prices. It can also be part of an arbitrage strategy linking spot and futures, or a hedge to defend other positions. That makes it hard to tell from the report alone whether the move reflects directional trading, a basis trade, a shift in maturities, or a mix of those factors.

Signs also emerged that positions may have been rolled forward. CME settlement prices announced on July 30 were $64,775 for the July contract, $65,085 for August and $65,335 for September. In the same data, open interest in the July contract fell by 1,942 contracts in a day, while August rose by 1,838 and September increased by 507. That pattern aligns with the possibility of rollovers or basis trades. But the figures were released after the Commitments of Traders report was compiled, making it hard to conclude they directly caused position changes by trader type.

There were no clear bullish signals in spot and derivatives markets, either. An analysis citing Glassnode data on July 29 said buying in perpetual futures and funding demand for long positions weakened. Spot bitcoin exchange-traded funds (ETFs) also saw net outflows of $526.5 million over four sessions through July 28.

Inflows returned to spot bitcoin ETFs on July 29, totaling $32.1 million. But that was not enough to offset the earlier outflows. The analysis said the cut in leveraged funds’ short positions alone makes it hard to say spot and derivatives markets broadly turned bullish.

The CFTC report ultimately shows leveraged funds’ net short exposure fell meaningfully. But asset managers cut positions at the same time, and the report reflects only futures market moves. It is too early to judge that institutional investors have shifted to a bullish bitcoin stance based on this change alone. A key point to watch will be whether the drop in futures shorts leads to inflows into spot ETFs and a recovery in supply and demand in perpetual futures.