Research Summary
The report discusses the impact of the German government’s sale of 1,000 bitcoins and the repayment of Mt. Gox creditors on Bitcoin’s price. It suggests a Put Butterfly strategy for traders expecting a downward trend in Bitcoin prices.
Key Takeaways
Bitcoin Market Volatility
- German Government’s Bitcoin Sale: The German government’s sale of another 1,000 bitcoins has caused significant price drops. This ongoing selling spree has been identified by LookOnChain, which has tracked two wallets moving a total of 9,500 BTC, worth approximately $537 million.
- Mt. Gox Repayments: The repayment of creditors by the hacked exchange Mt. Gox, in both bitcoin and bitcoin cash, has added to the market volatility. This has disrupted the recent activity in the crypto market.
Bitcoin Price Trend
- Broken Support Levels: The sell-off has resulted in crucial support levels for Bitcoin being broken. The price trend is currently downward, with a potential support area around $53,000 where the price may stabilize.
Put Butterfly Strategy
- Strategy Proposal: Given the market situation, the report suggests traders consider a Put Butterfly strategy. This involves buying one Put at a higher strike price, selling two Puts with a lower strike price, and buying one Put with an even lower strike price.
- Trade Structure: The report provides a specific trade structure for this strategy, with a target spot level of > $53,000. The maximum profit from this strategy would be $968/BTC, with a debit of $32/BTC.
Actionable Insights
- Consider Put Butterfly Strategy: Traders expecting a downward trend in Bitcoin prices might consider the Put Butterfly strategy. This involves buying and selling Puts at different strike prices. The report provides a specific trade structure for this strategy.
- Monitor Bitcoin Market: Given the ongoing selling spree by the German government and the repayment of Mt. Gox creditors, traders should closely monitor the Bitcoin market for potential price drops and volatility.
- Watch for Support Levels: Traders should keep an eye on Bitcoin’s support levels. The report notes that the price trend is currently downward, with a potential support area around $53,000 where the price may stabilize.
