When does GBTC unlock?
On July 18, the Grayscale Bitcoin Trust (GBTC) will be unlocking shares valued at 16,240 BTC. Economic TimesCrypto Week at a Glance: Crypto market feels the blues as GBTC shares unlock
18 July, 2021 - 12:13pm
Performance remains grimly sideways on the day of the largest GBTC unlocking event.
The weekend had produced little by way of surprises, with Bitcoin moving within a predictable range after seeing an initial brief spurt over $32,000 Friday.
Despite retaining $31,000 support and so far not retesting $30,000, Bitcoin was nonetheless on track to seal its lowest weekly close since December 2020.
#bitcoin still ranging sideways…. Surprise surprise
While some traders and analysts expressed their lack of satisfaction with spot price action after two months of hovering in the same range, others were still mindful of potential disruption.
"Wouldn’t surprise me if we get a random move in the final 2-3 hours of this weekly candle on Bitcoin," Michaël van de Poppe told Twitter followers.
Sunday marked the date of the largest in a series of unlockings at the Grayscale Bitcoin Trust ($GBTC). An event anticipated with nervousness by many, any obvious impact on price behavior had yet to be seen at the time of writing.
Altcoins looked similarly lackluster on Sunday, with many of the top fifty cryptocurrencies by market cap lining up weekly losses akin to Bitcoin's -8%.
Ether (ETH) hovered at $1,900, still clear of a support zone around $100 lower, while Amp (AMP) managed daily gains of 12%.
The overall cryptocurrency market cap stood at $1.294 trillion, with Bitcoin's share at 45.9%, a touch lower versus Friday.
17 July, 2021 - 06:00pm
Bears have pushed Bitcoin price to the lowest rungs of its current range, but savvy traders can still generate a nice profit via the Iron Condor options strategy.
China’s government implemented a series of measures to curb cryptocurrency mining and trading by ordering the immediate shut down of some operations and instructing domestic banks to suspend the bank accounts of entities involved in the industry.
Meanwhile, the $21 billion trust fund Grayscale and its GBTC security is facing a troublesome period as institutional investors’ 6-month lock up comes to an end, creating a potential $1.4 billion sell-off. However, it's worth noting that the 654,000 BTC tokens under management will not be moved on the market.
As a result of these factors, Bitcoin price has been stuck in a range for months and generally traders appear to be sitting on their hands until clarity on the entire situation clears up.
While traders are skilled at using perpetual futures contracts, most are unaware of additional instruments that can be used to maximize their gains. This holds especially true when markets range sideways and creates a perfect scenario for trading options.
For example, one can build an options strategy that maximizes gains even when there is not much price action.
By using both call (buy) and put (sell) options, a trader can create strategies to generate gains in sideways markets. These can be used in bullish and bearish circumstances, and most derivatives exchanges offer accessible options platforms.
The Iron Condor is a neutral strategy that consists of selling a $32,000 put to create positive exposure to Bitcoin while simultaneously selling a $34,000 call to reduce gains above that level. These trades were modelled from Bitcoin price at $31,750 and this trade uses an Aug. 27 expiry (40 days).
Two out-of-the-money (small odds) positions are needed to protect from the possible price crashes below $28,000 or Bitcoin appreciation above $38,000. These additional trades will give the trader peace of mind while also reducing the margin (collateral) requirements.
Any outcome on Aug. 27 between $29,200 (down 8%) and $36,660 (up 15%) yields a positive result. The maximum gain happens between $31,800 and $34,200, resulting in a 0.09 Bitcoin profit. On the other hand, the worst outcome is a 0.045 Bitcoin loss.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.