View on market
Spot Bitcoin ETFs saw net inflows over six days, including $64.8 million on Thursday. The BTC hourly chart suggests a potential breakout to the upside, with an ascending triangle pattern forming and higher highs and higher lows in place.
Call Ratio Spread
The proposed strategy is a Call Ratio Spread. A Call Ratio Spread involves buying a Call option that is OTM, and then selling two Calls of the same expiry, further OTM.
You might consider initiating this trade if you believe that BTC is on the verge of breaking out from the triangle pattern and can hit the next resistance area around $65,000.
Trade Structure
(OTM Call) Buy 1x BTC-30AUG24-$63,000-C @ $885
(OTM Call) Sell 2x BTC-30AUG24-$65,000-C @ $458
Target: Spot level < $65,000
Payouts
Maximum Profit: $2,031/ BTC
Net Credit of Strategy: $31/ BTC
Why are we taking this trade?
Spot Bitcoin ETFs have experienced net inflows, marking six consecutive days of positive movement. On Thursday alone, U.S. spot Bitcoin ETFs saw $64.8 million in net inflows. (Source: Farside).
Analyzing the hourly BTC chart reveals an ascending triangle pattern forming. As noted in recent insights, the reaction from the controlling supply zone highlighted in the chart has been minimal. This suggests a potential breakout to the upside, with higher highs and higher lows forming, as shown in the attached chart.
I anticipate it to move toward the next resistance area, which is approximately at the $65,000 level.
Hence, traders can consider deploying a Call Ratio strategy to capitalize on this outlook in BTC.
To implement this strategy, traders can buy a Call option (e.g., $63,000) and simultaneously sell Calls in double the quantity (2x) of a higher strike price (e.g., $65,000).
If the price of Bitcoin is at $65,000 when the options expire on August 30th, traders will be at maximum profit from the strategy.
It’s important to note that while this strategy collects an initial credit of $31, significant losses are possible due to the position’s net short Call exposure.
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.
