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Shorting Bitcoin Resistance with an Out-of-the-Money Call

Article Deribit Insights
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Summary

This trade note proposes selling a Bitcoin call on the view that overhead supply zones may limit further gains after the halving. Its example sells an April 26, 2024 call with a $72,000 strike for $230 per BTC, identifying that premium as the maximum profit if the option expires out of the money. The rationale cites Bitcoin trading around $64,000–$65,000, weaker ETF flows, and resistance areas visible on a four-hour price chart.

The position carries substantial upside risk: a sharp volatility increase and rally can make the short call lose value, and the note does not specify a hedge, stop, margin requirement, or loss limit. Its stated target is that spot remain below the strike. This is a single illustrative trade idea, not a tested strategy; the document provides no historical results or evidence that the cited resistance levels will hold. The premium and market context are specific to the dated example and should not be treated as current pricing.

Key ideas

  • The proposed bearish position sells an out-of-the-money Bitcoin call near a perceived resistance zone.
  • The example specifies a $72,000 strike and a $230 per BTC premium for an April 26, 2024 expiry.
  • The premium is the maximum stated profit if the call expires out of the money.
  • A sharp Bitcoin rally or volatility increase can create losses on the short call.
  • The note offers a market rationale but no backtest, hedge plan, or defined loss limit.

Tags

CryptoOptionsVolatilityRisk management

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.