View on market
BTC faced resistance around $61,700, resulting in a false breakout, and is expected to struggle to surpass $63,000 due to persistent resistance in the supply zone.
Bear Call Spread
The proposed strategy is a Bear Call Spread. A Bear Call Spread is achieved by simultaneously selling a call option and buying a call option at a higher strike price but with the same expiration date.
You might consider initiating this trade if you believe that BTC can face hurdles in crossing $63,000 pivots.
Trade Structure
(OTM Call) Sell 1x BTC-23AUG24-$63,000-C @ $853
(OTM Call) Buy 1x BTC-23AUG24-$64,000-C @ $647
Target: Spot level < $63,000
Payouts
Maximum Profit: $206/BTC
Why are we taking this trade?
As highlighted in yesterday’s insights, Bitcoin (BTC) encountered resistance near the $61,700 level. Despite a brief false breakout, the price was rejected at the upper boundary of the supply zone, failing to close above this area on the 4-hour chart on the closing basis. Given the persistent resistance in this supply zone, I expect Bitcoin to struggle in surpassing the $63,000 mark for sometime.
As a result, I anticipate that BTC shall continue trading in the range. Traders can capitalize on this outlook on BTC using a Bear Call Spread strategy.
To execute this strategy, traders can sell a call option of a higher strike price, eg. $63,000 while simultaneously purchasing a call option at an even higher strike price, like $64,000.
In case of market upturn, the maximum loss is limited to $794. Maximum loss of Bear Call Spread = Difference between strike prices of calls ($64,000 – $63,000) – Net credit ($206).
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.
