Will Bitcoin Break the $63K Barrier?

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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.

AUTHOR(S)

Anand Raj

Trading Strategy Specialist at Deribit

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The post Will Bitcoin Break the $63K Barrier? appeared first on Deribit Insights.

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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