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MBT1! trade ideas

Rising Bull and Raging Bear in BitcoinNewton is known to have said that "The motion of heavenly bodies can be computed, but not the madness of people". That aptly fits the times we live in. Bitcoin (“BTC”) prices have rallied 40% since the start of the year despite bleak economic outlook. A short squeeze in the flagship crypto asset where $850M in short positions was liquidated in just three days is cited as the primary reason for the rally. After the US Fed, ECB, and BoE rate announcements last week, where does BTC go from here? There are ample reasons to remain bearish as much as there is to turn bullish. Are we witnessing a dead cat bounce? Or is this the dawn of a new era where rates flatten or start to soften paving the path to a bull run? Amid the chaos, one thing remains clear. Low volatility. Both realized and implied volatility for BTC remains low. In a market that could either crumble or rally, this case study argues that a long strangle position in BTC options provides a compelling >2x reward to risk ratio. A long options position gains not only from a substantial price move but also from expanding volatility. THE UNCERTAIN ROAD AHEAD FOR BTC Outlook for BTC prices looks uncertain. Bullish tailwinds and bearish restrainers are concurrently at play. 1. Mixed Technical Signals BTC is approaching its 200-day moving average which has served as strong resistance in 2022. During the previous bear market rally, prices failed to breach past $25,000 per BTC, indicating strong resistance at this level. Current RSI at 79 points to BTC being overbought with a risk of downward price correction. However, the 20-day moving average inching towards the 200-day moving average might create the settings for a price rally. Also, the 10-day MA has crossed over the 200-day MA, forming a golden crossover which might be a harbinger of rally ahead. Using this same chart, we highlighted before that BTC prices are now just below the long-term MA (200-week MA) that has proven to be a strong indication for a long-term trend. The divergence from this trend over the past half-year might have been aberrations caused by multiple black swan events. 2. Price volatility related to GBTC lawsuit outcome Also as mentioned previously , Grayscale’s lawsuit against the SEC is an event to watch. Hearing date has been set for March 7th. If unsuccessful, Grayscale has announced plans to liquidate a portion of the trust to bring the GBTC shares back up to NAV of its holdings. This would involve heavy BTC selling pressure. GBTC has $14.5B in AUM with GBTC shares trading at a 41% discount. If GBTC succeeds, BTC prices could rally in sign of favorable regulatory acceptance. However, ETF’s creation/redemption mechanism would allow GBTC to rebalance their holdings resulting in spot BTC sales to arbitrage the discount. 3. Long term holders showing resilience and not selling Recent price rally has restrained long term holders from dumping their holdings. Growing number of long-term holders indicates conviction and that combined with climbing retail participation sets the tone for a bull run. 4. Hash Rate Rebound in 2023 BTC mining is profitable again. Rebounding hash rates, stable energy costs, and elevated BTC prices is a relief to the miners. Miner reserves are at a yearly low removing the risk of miners dumping their inventory. Miner sales are now limited to BTC mined daily. 5. Growing Open Interest but mixed directional positioning Asset managers have increased their net long positions by 53% between December 27th and January 24th. Meanwhile, leveraged funds continue to remain net short during this period. Clearly institutional investors remain puzzled on BTC price outlook. In a sign of growing investor attention, overall OI is up 8.4% over the last month and nearly 20% over the last quarter TRADE SET UP With adequate arguments both in favor of and against BTC prices, establishing a directional position is difficult. BTC carries a reputation for triple-digit volatility over its 14 years trading history. Intriguingly, BTC volatility has been soft in the recent past. Low volatility allows investors to acquire options at reduced costs. Being price agnostic, this study makes a case for a delta-neutral long strangle to secure a 2.27 reward to risk ratio. A long strangle combines of two trades. One, an out-of-the-money long put (at a strike below the current bitcoin price) to gain from a falling market. Two, an out-of-the-money long call (at a strike above the current bitcoin price) to gain from a rising market. A strangle allows the holder to extract an outsized gain (profit) for every unit of pain (costs incurred for premiums). This asymmetric pay-off in an options portfolio is referred to as convexity in finance. It enables holders to extract higher rewards for each unit of risk. Leg 1: Long Put options on BTCK3 (options on futures expiring in May 2023) with a strike price of $21,000 at a premium of $1,635. Leg 2: Long Call options on BTCK3 (options on futures expiring in May 2023) with a strike price of $29,000 at a premium of $1,105. Entry: $2,740 Break-even points: When CME-BTC-Futures touches $30,740 or $18,260. Target: BTC at either $33,600 or $13,700 Profit at Target: $1,860 (if BTC rises to $33,600) or $ 4,560 (if BTC drops to $13,700) Stop-loss level: At 30% of the drop in options premium. Loss at Stop-loss: $820 This strategy will start generating returns when the underling future trades past break-even points. It will also generate returns as volatillity expands fueling increase in strangle value. MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. This material has been published for general education and circulation only. It does not offer or solicit to buy or sell and does not address specific investment or risk management objectives, financial situation, or needs of any person. Advice should be sought from a financial advisor regarding the suitability of any investment or risk management product before investing or adopting any investment or hedging strategies. Past performance is not indicative of future performance. All examples used in this workshop are hypothetical and are used for explanation purposes only. Contents in this material is not investment advice and/or may or may not be the results of actual market experience. Mint Finance does not endorse or shall not be liable for the content of information provided by third parties. Use of and/or reliance on such information is entirely at the reader’s own risk. These materials are not intended for distribution to, or for use by or to be acted on by any person or entity located in any jurisdiction where such distribution, use or action would be contrary to applicable laws or regulations or would subject Mint Finance to any registration or licensing requirement.
CME:BTC1!
by mintdotfinance
9
$BTC $ETH & Altcoin data, Memecoins running, what it mean?Important short term🧵 $BTC RSI not showing good signs, NEG divergence #BTC HAS BEEN LEADING the rally but it's weakening We've posted on this $TOTAL 3 doing ok #memecoin running usually @ end of runs #bitcoin MUST hold support levels MUST hold number is 18kish --- 2 $DXY running & RSI over 50 again BAck to #crypto $Total = ALL including $BTC & $ETH Not showing recent strength of Total 3 = #altcoin They all still have a ways to go to break down trend Although #BTC HAS done it on it's own #bitcoin has been LEADING until now Rest time? --- 3 $BTC broke downtrend not long ago & struggled 24k has been issue = MAJOR RESISTANCE & NECKLINE for Inverse Head & Shoulder = BOTTOM Now $ETH RSI looks ok However HUGE resistance @ 1700 area #ETH hasn't broken downtrend --- 4 $BTC is to $DJI = $ETH is to $NDX #DJI broke out before #NDX did Very likely #BTC broke already & #ETH will follow We'll likely take another month or so to realize the bottom $TOTAL 2 = No #bitcoin, includes #ethereum & #altcoin, looks ok We'll see how all pans out Gnight
CME:BTC1!
by ROYAL_OAK_INC
More data on $BTC, I'll leave the decision to YOU!PLS SEE PROFILE FOR ALL DATA 1/ #FED gave what #markets wanted But what about #crypto, especially $BTC #BTC was breaking 24k & lost steam Buy volume kicked in nicely AFTER meeting However, daily was not great, subpar #bitcoin has a battle Does look better than all of 2022 RSI HOLDING overbought = GOOD --- 2/ #bitcoin broke 24k June 13, 22 & has STRUGGLED to break above it Highest $BTC readings since Jan 21! = GOOD NOW HERE IS THE 🗝️! When does the RSI reading tend to get that high? Showed the upcoming $BTC chart few times already #crypto --- 3/ Current RSI shot up HARD! Let's keep going When does DAILY #BTC RSI reading tend to get as high as it currently is now? Hint - Light GREEN on RSI What about WEEKLY $BTC? Current RSI SAME as it was @ A BOTTOM B Bottom was lower FYI 90+ reading on #bitcoin = TOP #crypto
CME:BTC1!
by ROYAL_OAK_INC
$BTC monthly data that IS important vs what others are sayingMany on CT and other socials are talking about green candle close for #BTC on monthly chart NOT IMPORTANT! What's more important? Red Mov Avg! Stops $BTC advance VOLUME! Look @ A & B, this January is heavier than those bottoms Uptrend! Higher low = UPTREND in tact #bitcoin #crypto ADDED FROM ANOTHER POST Reviving thread Used Weekly charts $BTC broke downtrend, decent volume #BTC volume IS better vs A & on PAR with B #Bitcoin had Bullish Moving Avg Crossover 1-3 months after LOWS, now in process after 2 months RSI reached overbought: 4 months on A & 5 months on B Interesting!
CME:BTC1!
by ROYAL_OAK_INC
Possible BTC Routes A possible bullcase for bitcoin, the GME gaps. There are gaps around $20k, $27.5-28.5k and 35k. The gaps are the difference in price from futures close on Friday and futures open on sunday. These gaps tend to be "filled" next time the price action covers that area. Considering the current price action, bitcoin has the possibility of filling the gap at $20k while it retests its current breakout, before proceeding to fill the $28k gap. If it fails the restest of $20k, we'll have to see if it can hold $19.5k. Personally I see the orange line playing out, where bitcoin retests $19.5k before it goes higher. Keeping an eye on the dollar. I feel like any sudden moves sends this back to <$21k. Would be quite the bull trap if this goes to $28.5k before rug pulling for 2H 23. Getting interesting.
CME:BTC1!
by cmerged
$BTC bearish engulfing light volume - Now what?1 Said MANY TIMES 24k would be HARD for $BTC #BTC high = 24080 DAMAGE DONE: Short up trend broken Bearish engulfing but LIGHT volume STILL IN PLAY: Breakaway Gap Inverse Head & Shoulder RSI above overbought, red dotted line #bitcoin playing out as expected Rest of #crypto? --- 2 #Bitcoin BULLISH WEEKLY CROSSOVER soon? Bearish crossover happened DEC 22 $TOTAL 3 = #crypto #altcoins - hasn't looked as strong as #BTC RSI been going lower but currently resting @ red moving avg, holds = good 1 last thing $BTC 4Hr hasn't traded under avg's since Dec 30
CME:BTC1!
by ROYAL_OAK_INC
BTC Futures Rising Wedge Forming, confluence with newsI frequently chart the BTC CME Futures chart alongside a normal BTC Exchange chart. The difference between them is that CME is closed for the weekend and operated by a regulated group. This means the CME chart can frequently show different trends/patterns as it removed a lot of the noise, unnecessary wicks, etc that can come from exchanges trading over the weekend. I'm watching the early stages of this rising wedge forming. It's a bit early to call it a confirmed pattern still but worth putting on the radar. I often like to find confluence in charts aligning with news; I don't trade news but news is often a perfect catalyst for patterns to breakout. So what I have shown in the chart is a pattern that comes to an apex in about a week's time. And we have February right around the corner with a lot of news coming out, specifically the FOMC meeting minutes releasing on February 1st. This would be the perfect catalyst to create some volatility, quickly eliminate overleveraged longs and shorts, and then push for a pattern break of the rising wedge. Marking this idea as short as I am bearish overall and ready for a market reset, but note that this chart displays an idea where BTC gets one more push higher at the beginning of this week. Happy to answer any questions people have on this idea!
CME:BTC1!Short
by Obscure_Trading
Bitcoin CME Report for Tuesday 17 Jan 2023 to Tuesday 24 Jan 202CME Overview: Bitcoin and crypto, in general, have had a major run starting most significantly since the start of the new year. BTC1! Is the Bitcoin Chicago Mercantile Exchange Futures trading and comprises significant institutional trading of Bitcoin. The most significant data we use in this report are from the Dealer and Intermediaries which are the Exchanges and Brokerages as well as the Asset Managers the latter of which has been longing the 2021 all-time high and subsequent bear market to their peril. The report that comes out on Fridays shows the actions that occurred by position from the previous Tuesday to the Tuesday before that. This current report shows a week-long snapshot of CME positions on Bitcoin from Tuesday the 17th of January to Tuesday the 24th of January. New reports are released on the following Friday after the market closes. Bitcoin CME Report for Tuesday 17 Jan 2023 to Tuesday 24 Jan 2023 From the 17th to the 20th of January price increased from $21.2k to $22.4k before a 2-day break for the weekend. Most notably from Monday the 23rd and Tuesday the 24th the CME gapped up, meaning that the close price from Friday (CME closes for weekend trading) the price of Bitcoin increased from $22.4k and opened on Monday at $22.6k. This creates a “Gap”, and by rule, gaps do not have to be filled however probability says they have a higher fill rate than not. That weekend gap has now been taken out completely however a gap from the 14th and 15th of January largely still exists between $19.9k and $20.4k with a massive and older gap from the 12th and 13th of June 2022 above us at $27.4k and $29.1k. Dealers and Intermediaries are Extremely Short Short Positions: In the current reporting period, we see that Dealers and Intermediaries (The Exchanges / Brokerages) increased their longs by 101 positions bringing their total long positions to 304 while still adding 726 short positions bringing their total short positions to 4,346. This is very different from what usually occurs in relation to lower timeframe price action as we see Dealers and Intermediaries usually adjusting their positions more regularly to catch the Major Moves. As the price has increased in this period this is the most significant adding of short positions by the Dealers and Intermediaries that we have seen since the end of March 2022 when Dealers and Intermediaries massively shorted to force a Q2 open underneath the Q1 open and thereby wrecking quarterly options. Dealers and Intermediaries are now 93.4% short. Asset Managers are still largely out of Position and Entirely Long Long Positions: The other interesting figure from a more accurate perspective is how out of position the Asset Managers have been in the last year plus as they began heavily building longs at the highs in the fall of 2021 and now they have begun to heavily increase their positions in this weeklong period by a further 644 positions to a total of 7,671 long positions and closed 243 short positions leaving only 63 short positions total for asset managers. This means that compared to short positions Asset Managers and Institutions are 99.2% Long with relatively zero shorts. Summary This most recent COT report is interesting as it shows Asset Managers and Institutionals are only long at the same time as we have had good market movement to the upside with each level creating support. The Asset Managers and Institutionals are entirely in Long positions as they added massive longs that are/were out of position going back to November of 2021 and throughout the 2022 bear market. Bitcoin is still holding key levels however, the extreme bearish sentiment is starting to dissipate as Bears are being and have been punished in every range and consolidation period. Every continuous move-up was met by heavy shorting from retail thus providing more liquidity to move price upwards. This is now starting to change as Retail is beginning to add longs in this previous weekly range while shorts were squeezed out of position on Wednesday. The gap down at $19.9k to $20.4k is still in place and breaking any significant structure above still allows the market to capitalize on taking out later longs that got into position over $20k which have yet to be punished. The upside move is still in play until support is broken, a new gap that could be formed come the Monday open on Jan 30th would potentially provide an incentive for market movement as we open the week. Late Longs have not been significantly punished as heavier liquidity is building below us. That being said the weekend trading can decide quite a bit if we start closing 4hr or daily levels below the Weekly Open at $22.6k. The confirmed loss of this level will potentially allow us to short higher up and at the failure of the structure. Shorts have also already been punished and Longs have been by all accounts allowed to keep positions as heavy support still exists. All eyes are on the FOMC interest rate decision on Wednesday the 1st of February, with the forecast being an increase of .25% from 4.5% to 4.75% which should be a catalyst to move the market should the forecast not meet the decision. Retail is starting to flip their bias long just as the Asset Managers have both of whom have been largely on the wrong side of the market for well over a year. Conversely, the Dealers and Intermediaries have been largely correct in their positions and their massive adding of shorts in this area which should not be taken lightly as they have been right throughout the bear market. Our thoughts about the Dealers and Intermediaries are simple, don’t bet against them, they have all the data and see all the positions.
CME:BTC1!
by TrendmasterOfficial