Here's how Bitcoin pro traders plan to profit from BTC’s eventual pop above $20K

Bitcoin (BTC) entered an ascending transmission successful mid-September and has continued to commercialized sideways enactment adjacent $19,500. Due to the bullish quality of the method enactment and a driblet successful merchantability unit from troubled miners, analysts expect a terms summation implicit the adjacent mates of months.

Bitcoin/USD terms astatine FTX. Source: TradingView

Independent expert @el_crypto_prof noted that BTC's terms formed a "1-2-3 Reversal-Pattern" connected a regular clip frame, hinting that $20,000 could flip to enactment soon.

— ⓗ (@el_crypto_prof) October 20, 2022

Fundamental analysts are besides attributing the sideways enactment to troubled Bitcoin-listed mining companies. For example, Stronghold Digital Mining announced a indebtedness restructuring connected Aug. 16 that included the instrumentality of 26,000 miners.

One nationalist miner, Core Scientific, sold 12,000 BTC betwixt May and July, portion publically traded mining companies sold 200% of their Bitcoin production. Bitcoin enthusiast @StoneysGhoster adds that excessive leverage caused the forced selling, not the mining enactment itself.

— StoneysGhost (@StoneysGhoster) October 8, 2022

Regardless of the basal lawsuit for Bitcoin's terms betterment supra $20,000, investors fearfulness the interaction of an eventual banal marketplace clang arsenic cardinal banks proceed to summation involvement rates to curb inflation.

Considering the persistent uncertainty caused by macroeconomic factors, a strategy that yields gains successful the $21,000 to $28,000 scope portion limiting losses beneath $19,000 seems the astir prudent. In that sense, options markets supply much flexibility to make customized strategies.

It starts with selling enactment options for upside exposure

To maximize returns, investors could see the Iron Condor options strategy that has been somewhat skewed for a bullish outcome. Although the enactment enactment provides its purchaser the privilege to merchantability an plus astatine a fixed terms successful the aboriginal — selling this instrumentality offers vulnerability to the terms upside.

Bitcoin options Iron condor skewed strategy returns. Source: Deribit Position Builder

The supra illustration has been acceptable utilizing the BTC Nov. 25 options astatine Deribit. To initiate the trade, the purchaser should abbreviated (sell) 1 declaration of the $23,000 telephone and enactment options. Then, the purchaser needs to repetition the process for the $25,000 options.

To support against utmost terms movements, a enactment enactment astatine $19,000 has been used. Consequently, 2.6 contracts volition beryllium indispensable depending connected the terms paid for the remaining contracts.

Lastly, if Bitcoin's terms rips supra $32,000, the purchaser volition request to get 1.6 telephone enactment contracts to bounds the strategy's imaginable loss.

The max nett is 2x larger than the imaginable loss

Even though the fig of contracts successful the supra illustration aims for a maximum BTC 0.30 ($5,700) summation and a imaginable BTC 0.135 ($2,560) loss, astir derivatives exchanges judge orders arsenic debased arsenic 0.10 contracts. As a result, the strategy yields a nett net if Bitcoin trades betwixt $20,000 and $29,600 (+56%) connected Nov. 25.

The max nett summation occurs betwixt $23,000 and $25,000, yielding a instrumentality much than 2 times higher than the imaginable loss. Furthermore, with 35 days until the expiry date, this strategy gives the holder bid of caput because, dissimilar futures trading which travel with an inherent liquidation risk.

The views and opinions expressed present are solely those of the writer and bash not needfully bespeak the views of Cointelegraph.com. Every concern and trading determination involves risk, you should behaviour your ain probe erstwhile making a decision.