This simple Bitcoin options strategy allows traders to go long with limited downside risk
Bitcoin (BTC) bulls were hopeful that the Nov. 21 dip to $15,500 would mark the cycle bottom, but BTC has not been able to produce a daily close above $17,600 for the past eighteen days.
Traders are clearly uncomfortable with the current price action and the confirmation of BlockFi's demise on Nov. 28 was not helpful for any potential Bitcoin price recovery. The cryptocurrency lending platform filed for Chapter 11 bankruptcy in the United States a couple of weeks after the firm halted withdrawals.
In a statement sent to Cointelegraph, Ripple's APAC policy lead Rahul Advani said he expects the FTX exchange bankruptcy to lead to greater scrutiny on crypto regulations." Following the event, several global regulators pledged to focus on developing greater crypto regulation.
Unfortunately, there is no way to know when investors' sentiment will improve and trigger a new bull run. Despite this, for traders who believe BTC will reach $20,000 by Dec. 30, there is a low-risk options strategy that could yield a decent return with limited risk.
Buying Bitcoin futures pays off during bull markets, but the issue lies in dealing with liquidations when BTC price goes down. This is why pro traders use options strategies to maximize their gains and limit their losses.
The bullish skewed Iron Condor strategy can maximize profits near $21,000 by the end of 2022 and it limits losses if the expiry price is below $18,000. It is worth noting that Bitcoin traded at $16,168 when the pricing for this model happened.
The call option gives its holder the right to acquire an asset at a fixed price in the future. For this privilege, the buyer pays an upfront fee known as a premium.
Meanwhile, the put option allows its holder to sell an asset at a fixed
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