Trading strategy : “Thanksgiving” Part II

Just a week ago, the Thanksgiving correction took the market by surprise and gave the dip buyers an unexpected Black Friday discount to load up on BTC before our beloved coin can resume its march to the desperately awaited $20k break through.

Just after, we bounced nicely and found great support around the low $16k region. The correction was deemed very healthy and the rapid reversal gave even more confidence to the crypto bulls that this was the final push to $20K. So far, we have failed to even touch it , despite making all time highs on some crypto exchanges.
Time seems to pass so fast in the crypto world that a week can sometimes give the impression of eternity and waiting for the $20k can rapidly feels like waiting for Godot.

Looking at graphs, over the last days, we were having a nice triangle formation. It looked like a break was imminent, with odds favouring more the upside.

Unfortunately, today we failed to break to the upside and quickly lost 600 points to trade $18,800.

That changes the picture and now there is a decent chance we could be retesting the “Thanksgiving” support, which would bring us to the low 18K.

I would the suggest to put on a 11Dec20 $18,500/$18,000 Put spread for $140. It has a -11% Delta and is slightly long vega (at 60 vol, after the vol drop we had over the last days i would not be too worried about that)
To reduce cost, it could be financed by shorting the 11Dec20 $22K call for $85, profiting of the massive negative skew. A bit riskier but the $22k strike should give some head room in case we break above the $20K over the coming days. Happy trading !

Source:
Tradingview.com

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