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Using a Bitcoin Bear Put Spread Against Resistance

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Summary

This trade note presents a bearish Bitcoin options position based on the view that resistance near $61,700 and weakening lower-time-frame demand could lead to further declines. It proposes buying a put at a higher strike and selling a put at a lower strike, with both options sharing an expiration date. The example uses strikes of $57,500 and $56,500 and describes a net debit of $205 per BTC, with maximum profit of $795 per BTC if Bitcoin is at or below the lower strike at expiry.

The rationale cites price behavior around the stated supply zone and the lack of a notable bullish response to reported institutional ETF exposure. These are the author's market observations, not a tested forecasting model. The note does not provide chart data or historical performance, and the position's payoff depends on the stated expiry and option prices. It also cautions against using the analysis as the sole basis for a trading decision.

Key ideas

  • A bear put spread combines a purchased put with a lower-strike put sold for the same expiry.
  • The proposed Bitcoin trade is intended to benefit from a decline below the lower strike by expiration.
  • The spread limits the stated maximum loss to the initial net debit.
  • The bearish case relies on resistance and weakening demand observations rather than quantified historical evidence.

Tags

CryptoOptionsDerivatives pricingRisk management

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