Research Summary
The report discusses the recent inflows into US spot Bitcoin ETFs and suggests a potential bullish trend change for Bitcoin. It proposes a Call Ratio Spread strategy for traders who anticipate a hurdle at around $66,000. The report also provides a step-by-step guide on how to execute this strategy on Deribit.
Key Takeaways
Bitcoin ETF Inflows
- Significant Inflows: US spot Bitcoin ETFs have seen inflows of $511.2 million over the past two days. This includes $216.4 million on Tuesday and $294.8 million on Monday, indicating a potential trend change for Bitcoin.
Call Ratio Spread Strategy
- Strategy Proposal: The report suggests a Call Ratio Spread strategy for traders with a bullish outlook on Bitcoin. This involves buying an Out of The Money (OTM) Call option and selling two or more of the same option type, further OTM.
- Trade Structure: The proposed trade structure involves buying 1x BTC-19JUL24-$64,000-C @ $363 and selling 2x BTC-19JUL24-$66,000-C @ $174. The target is a spot level less than $66,000.
- Potential Profits: The maximum profit from this strategy is $1,985 per Bitcoin, with a net debit of the strategy at $15 per Bitcoin.
Market Outlook
- Technical Perspective: From a technical perspective, Bitcoin bounced from lows around $53,700 and broke through short-term resistance levels, indicating a potential trend change. However, Bitcoin may face challenges trading above the $66,000 mark, which was the previous pivot point when the trend shifted.
- Economic Indicators: U.S. Federal Reserve Chair Jerome Powell stated that the U.S. economy is no longer overheated and that the labor market is “fully back in balance.” This could potentially impact the Bitcoin market.
Execution on Deribit
- Trade Execution: The report provides a step-by-step guide on how to execute the proposed Call Ratio Spread strategy on Deribit, a cryptocurrency futures and options exchange.
Actionable Insights
- Consider the Call Ratio Spread Strategy: Traders with a bullish outlook on Bitcoin might consider the proposed Call Ratio Spread strategy. This strategy could potentially yield maximum profits if Bitcoin is at $66,000 when the options expire on July 19th.
- Monitor Bitcoin’s Price Movement: Traders should keep an eye on Bitcoin’s price movement, especially around the $66,000 mark, which is a key resistance level. Any significant changes could impact the effectiveness of the proposed strategy.
- Stay Informed on Economic Indicators: Traders should stay informed on economic indicators, such as statements from the U.S. Federal Reserve, as these could potentially impact the Bitcoin market.
