Top News of the Week
1. Correction After All-Time Highs:
Bitcoin hit an all-time high of $99,000 but later corrected to $91,990, marking a slight 0.38% decrease over the past week. This movement was driven by record inflows into spot ETFs and strong institutional demand.
2. Increased Institutional Investment:
Major firms like BlackRock have launched Bitcoin ETFs, making it easier for retail investors to access the asset and boosting demand. Additionally, companies like MicroStrategy plan to acquire more Bitcoin, reflecting growing institutional interest.
3. Market Outlook:
Analysts predict Bitcoin could break $100,000 by year-end, supported by favorable policies and increasing investor interest.
Bitcoin Chart Analysis
After hitting an all-time high of $99,000, Bitcoin has entered a correction phase, now trading around $96,000. This suggests a consolidation period following a strong rally, with the price stabilizing within a key range. T echnical indicators, such as the Net Unrealized Profit/Loss (NUPL), show that the market remains in positive territory, supporting a moderately bullish outlook.
Skew Analysis (Summary)
1. BTC:
○ Over 30 days, skew reflects a balance between Call and Put demand, indicating stability in the medium term.
○ Over 7 days, the Put Skew (87%) shows increased short-term uncertainty, with a higher demand for downside protection.
2. ETH:
○ Over 30 days, the elevated Put Skew (88%) suggests traders perceive greater risks in ETH compared to BTC.
Review of Last Week’s Strategy
The strategy consisted of:
1. Selling a Put (Strike $90,000, expiring December 27):
○ Current Result: The premium slightly increased, resulting in a small loss of $1.19 per contract.
○ Comment: We remain comfortable acquiring BTC at $90,000 if the price drops, ensuring the desired exposure.
2. Buying a Call (Strike $105,000, expiring December 27):
○ Current Result: The premium decreased slightly, leading to a $1.01 loss per contract.
○ Comment: If the market rises, our Call allows us to profit from the upside. Meanwhile, this strategy is cost-neutral as the premium from the sold Put finances the purchased Call.
3. Utilizing Margin with CoinCall’s Simple Earn:
Any unused capital remains invested in CoinCall’s Simple Earn, generating passive yields between 12% and 20% annually, contributing to the overall strategy’s profitability.
Learning This Week: An Introduction to Calendar Spreads
Calendar spreads are an advanced options strategy that takes advantage of the differences in time decay (Theta) between short-term and long-term options. This strategy works particularly well in low to moderate volatility environments, such as the current market, which appears more stable after the elections.
● Basic Example:
○ Buy a Call on BTC with a 60-day expiry at a $100,000 strike.
○ Sell a Call on BTC with a 30-day expiry at the same $100,000 strike.
Benefits of Calendar Spreads:
1.Generate income from Theta decay in range-bound markets.
2.Lower initial cost due to the short-term option sale.
3.Flexible in low-volatility scenarios.
Next Strategy: Calendar Spreads
Next week, we’ll implement our first calendar spread strategy on BTC, leveraging the current
range and skew dynamics. Given the post-election environment of reduced volatility, it’s an
ideal time to explore this approach.
Summary and Conclusion
1. Market Outlook:
Bitcoin is consolidating near $96,000 after reaching all-time highs. The 7-day skew indicates greater uncertainty, while the 30-day skew remains balanced.
2. Current Strategy:
○ We maintain the current strategy of selling a Put and buying a Call.
○ If the market rises, we capture upside potential. If not, the strategy remains cost-neutral, avoiding unnecessary expenses.
○ Unused margin generates passive income through CoinCall’s Simple Earn, yielding 12%-20% annually.
3. Next Steps:
○ Monitor BTC within the $95,000-$100,000 range.
○ Prepare to launch the calendar spread strategy next week.
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Disclaimer: This article is for educational purposes only and does not constitute financial advice. Every investment involves risk. Remember to follow daily strategies on our Telegram channel: https://t.me/T okencimiento/1
I trade crypto options on Coincall. Here’s the link: https://www.coincall.com/r/T okencimiento15r
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