View on market
Bitcoin seems to have established a short-term low, with recovery evident as it breaches lower time frame resistance pivots making a Bull Call Spread a better choice to consider.
Bull Call Spread
The proposed strategy is a Bull Call Spread. A Bull Call Spread consists of one long Call with a lower strike price and one short Call with a higher strike price. Both Calls have the same underlying and the same expiration date. It is established for a net debit (or net cost) and profits as the underlying price rises.
You may consider taking this trade if you expect the BTC price to rise and believe short term low formation has occurred.
Trade Structure
(OTM Call) Buy 1x BTC-31AUG24-$61,000-C @ $357
(OTM Call) Sell 1x BTC-31AUG24-$61,500-C @ $250
Target: Spot level > $61,500
Payouts
Maximum Profit: $393/BTC
Debit of Strategy: $107/BTC
Why are we taking this trade?
From a technical standpoint, the attached 4-hour BTC price chart reveals that Bitcoin has established a short-term low. The recovery is noticeable, with short-term resistance levels being breached with minimal pullbacks. This pattern indicates the possible formation of a short-term low in BTC, suggesting that the uptrend may persist, albeit at a slower pace.
Hence, traders might consider deploying a Bull Call Spread strategy to capitalize on this anticipated price movement based on the above analysis.
To implement this strategy, traders can buy a Call option at a lower strike price (e.g., $61,000) and simultaneously sell a Call option at a higher strike price (e.g., $61,500).
If the price of BTC is at or above $61,500, when the options expire on August 31st, traders will achieve maximum profit from this strategy.
In case of a market downturn, the potential loss is limited to the initial debit of $107.
How to take this trade on Deribit?
Step 1: Go to Combo books under the Strategy tab & Create combo.
Step 2: Click RFQ and send your order to the Combo List.
Step 3: Go to Combo list (BTC), click on your Strategy and execute.
Disclaimer
This report must not be used as a singular basis of any trading decision. The document includes analysis and views of our research team. The document is purely for information purposes and does not constitute trading recommendation/advice or an offer or solicitation of an offer to buy/sell any contract.
