Research Summary
The report discusses the recent recovery of Bitcoin (BTC) and proposes a Call Butterfly Spread strategy for traders eyeing upward movement in BTC prices. The strategy involves buying and selling Call options at different strike prices. The report also highlights the significant resistance and high open interest at the $67,000 level, which could pose a challenge for further price increases.
Key Takeaways
Bitcoin’s Market Recovery
- Bitcoin’s Bottom: The report notes that Bitcoin found a bottom at $53,700 and began a recovery, with positive BTC spot ETF inflows throughout the week.
- Resistance at $67,000: Despite the recovery, significant resistance and high open interest at the $67,000 level could pose a challenge for further price increases.
Call Butterfly Spread Strategy
- Strategy Overview: The proposed strategy is a Call Butterfly Spread, which involves buying one Call at a lower strike price, selling two Calls with a higher strike price, and buying one Call with an even higher strike price.
- Trade Structure: The report provides a specific example of this strategy, involving buying a Call at $66,000, selling two Calls at $67,000, and buying a Call at $68,000.
- Profit and Loss: The maximum profit from this strategy is $950 per BTC, while the potential loss is limited to the initial debit of $50 per BTC.
Trading on Deribit
- Execution Steps: The report outlines the steps to execute this strategy on Deribit, which involves creating a combo, sending the order to the Combo List, and executing the strategy.
Actionable Insights
- Consider the Call Butterfly Spread Strategy: Traders who anticipate an upward movement in BTC prices could consider the Call Butterfly Spread strategy. This strategy could provide a maximum profit of $950 per BTC, with a limited potential loss.
- Monitor the $67,000 Level: Traders should keep an eye on the $67,000 level, as significant resistance and high open interest at this level could pose a challenge for further price increases.
- Use Deribit for Execution: Traders can use the Deribit platform to execute the Call Butterfly Spread strategy. The report provides detailed steps for executing this strategy on Deribit.
