In stark contrast from the past three months of bearish ranging price action, BTC has made a sharp bounce back to reclaim the lost territory of $47K.
Despite a steep uptrend during the past three weeks, the trend has evidently been weakening leading to the formation of a long term rising wedge pattern on the hourly or 4 hourly charts of Bitcoin. This has led to an increase in volatility and consequently smaller daily moves making shorting FTX move contracts extremely profitable.
(Disclaimer: shorting move contracts is risky if you do not know how they work)
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Link: https://www.tradingview.com/x/wJZyPRNS/
The above chart is self-explanatory, with important levels marked for reference.
But, now when the rising wedge is about to break down to the downside, I'd be looking for short entries on Bitcoin.
However, if you want to take a better bet you can short BTC-MOVE-2021Q3 on FTX.
This is because the strike price of the move contract is $34,995 so it will be profitable to short Bitcoin move contracts.
The current price of the BTC-MOVE-2021Q3 is around 14100 (at the time of writing).
However, there is a downside.
The best case scenario would be if Btc drops from the current price to the strike price (Around $34,995). If it goes below that, it's best to close the move short positions.
In case Bitcoin does not break down, you would still gain some small profits because of the time decay functions of options.
(Pro Tip: If the price of Bitcoin expires to the strike price on 9/24/2021, the move contract will expire to zero.)
- Good luck! Always manage your risk properly, and keep position size manageable.
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