View on market
The 4H BTC chart indicates early signs of recovery with support around $58,500, while the daily chart’s Drop-Base-Rally pattern suggests a stronger rebound. Traders might anticipate a bounce and consider a Bull Call Spread strategy to leverage this trend.
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 stock and the same expiration date. It is established for a net debit (or net cost) and profits as the underlying stock rises in price.
You may consider taking this trade if you expect BTC to respect the higher time frame demand zone.
Trade Structure
(OTM Call) Buy 1x BTC-27JUN24-$62,500-C @ $250
(OTM Call) Sell 1x BTC-27JUN24-$63,500-C @ $110
Target: Spot level > $63,500
Payouts
Maximum Profit: $860/BTC
Net Debit of Strategy: $140/BTC
Why are we taking this trade?
As demonstrated in the attached 4-hour BTC price chart, Bitcoin has begun to show some initial signs of recovery after its decline, finding support around the $58,500 pivot points. Additionally, the daily chart reveals a Drop-Base-Rally pattern, which is generally a stronger formation following a downturn. This demand zone holds significant importance as it is observed on a higher time frame and previously propelled prices to a peak of $72,000. Hence, traders might expect a bounce and consider deploying a Bull Call Spread strategy to capitalize on this anticipated trend.
To implement this strategy, traders can buy a Call option at a lower strike price (e.g., $62,500) and simultaneously sell a Call option at a higher strike price (e.g., $63,500).
If BTC reaches $63,500 when the options expire on June 27th, traders will achieve maximum profit from this strategy.
In case of a market downturn, the potential loss is limited to the initial debit of $140.
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.
