The Case for OTM Puts on Crypto Exposed Stocks.

1 мар.

In BTC right now we have a really interesting setup where if it comes to pass there’s a bearish reversal we can be almost sure of a rug pull event.

For a big bearish reversal thesis to be valid here the rally from the 15K low would have to be the Mother of all bull traps. If it is a bull trap > Then there has to be a rug pull. We can be almost certain of it. Like when SPX was much lower in 2023 and I said; If we rally > Then it has to be aggressive.

Certain things have certain signatures. And if this is a bull trap - there has to be a massive rejection. In the first section of this style of rug pull we typically see the drop taking the market down 50%. This is frequently in a “Crash” style. Something really big and strong. Even if not, these are our levels.

First drop takes out about 50%. Then there’s a bull trap and then the downtrend begins. It’s a three stage process.

Shock.
Relief/Optimism.
Downtrend.




So we can not know if the bear move will or won’t happen but we can very reasonable expect if the bear move happens it’s going to be something exceptional.

And because we’re trading at the 86 now we also have a fair case to make that even if the overall move is going to be bullish we can see a retesting of the previous fibs - and if this move happens, it will also almost invariably be in a strong down move.


At this point it’s quite reasonable to say if any bear move comes, we have a great case to expect it to be a sharp one. Puts benefit from such moves, so it makes sense to look for complimenting signals on anything related for put options where we can take small risks but have high pay off if it works out.