Data suggests traders anticipate a sharp price move in Bitcoin price, noshitcoins explores an options strategy that allows for a risk free BTC position.
Bitcoin’s price broke below its 55-day resistance at $27,000 on May 12, down 12.3% in 30 days. But more importantly, it decoupled from the S&P 500 Index, which is basically flat from 30 days ago and 15% below its all-time high.As the chart indicates, for some reason, Bitcoin investors believe that the favorable macroeconomic trends for risk markets were overshadowed by the increasing risk perception of the cryptocurrency sector.
Further fueling investors’ hope is the Bitcoin halving expected for April–May 2024, when the miners’ incentive per block will be reduced from 6.25 BTC to 3.125 BTC.on May 13, according to the Glassnode analytics firm. In total, a whopping 190,000 “whole-coiners” have been added since February 2022. First, the trader needs to buy protection from a downside move by buying 2.3 BTC puts $22,000 options contracts. Then, the trader will sell 2.0 BTC put $25,000 options contracts to net the returns above this level. Finally, the trader should buy 3.2 call $34,000 options contracts for positive price exposure.That options structure results in neither a gain nor a loss between $25,000 and $34,000 .
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