Overview

  • BTC has been oscillating around the MA(7) in the market over the past week, with a significant decrease in trading volume. The current price is close to $69,000, while ETH is around $3,800.
  • BTC’s DVOL has continued to drop to 51, while ETH’s DVOL is around 67. This year, BTC’s lowest DVOL was in February, when it was near 42. This was followed by a big pump, with BTC’s price surging from $40,000 to a new ATH of $73,777. If BTC’s DVOL further drops below 50, the supply-demand dynamics in the options market will gradually shift from sellers to buyers.
  • The implied volatility of most altcoins has hit new lows for the year, with SOL’s weekly IV dropping to 64, DOGE’s weekly IV falling to 80, and MATIC’s weekly IV at 53. The 25D RR of altcoins has significantly increased, indicating a rebound in short-term bullish sentiment.
  • Regarding prices, the BTC liquidation heatmap shows that shorts have accumulated high liquidity above $69,000. It remains to be seen whether BTC will rise in the short term to liquidate this liquidity.

Trading Idea

Given the current calm market conditions, we believe ETH’s performance in June remains promising. A more stable strategy is to sell covered call options, which can easily achieve an APY of over 20%.

Sell OTM call options expiring next Friday every Monday, with a strike price approximately 15% higher than the current market price.

Example:

  1. With ETH priced at $3,830, we opt to sell equivalent ETH-14JUN24-4400-C options on Monday for the upcoming Friday (12-day interval), with a strike price of $4,400 (14.8% above the current price), generating a premium (mark price) of $35.4.
  2. Executing the covered call strategy bi-weekly, the estimated annualized return is: 35.4/3,830（365/14） = 24.0%*

Disclaimer

This document is for reference only and does not constitute financial advice. Readers should not rely on the information contained herein to make any financial decisions.

Categorized in:

Thoughts