10x Research, led by Markus Thielen, likes Bearish Options Betting on Strategy (Mstr) as the NASDAQ -noted Bitcoin
Holder share price diverges from the upward BTing BTC price.
In a report that was sent to clients on Friday, Thielen recommended a bear reduction on Mstr, involving a long position in the option of $ 370 and a short position in $ 300 -Put, both expired on June 27.
This strategy makes maximum profits if Mstr falls to $ 300 or lower by June 27, representing a Bearish effort on the share price. Put option secures the buyer against potential price drop in return for a small premium payment in advance.
The maximum loss for put spreads -buyers, whose Mstr’s price is embarking on a new Uptrend, is limited to the original cost of the strategy, which was $ 13.89 on Friday.
However, Mstr fell 7% to $ 369 on Friday according to Data Source TradingView. Microstratey has 576,230 BTC, the largest for any publicly listed company that has steadily accumulated coins since August 2020 through debt financing.
Over the years, it has emerged as a preferred instrument for institutions that want to take exposure to BTC without having to own cryptocurrency.
The share price has recently deviated from the upward trending BTC price and raises alarm bells on crypto-social media.
While BTC hit a record height of over $ 110,000 last week, Mstr’s Rise stopped at about $ 440, and fell well during its life of $ 543 reached in November.
“This trade captures the growing interruption between Bitcoin’s strength and Microstratey’s fading momentum and volatility. Despite Bitcoin reaching the heights of all time, Mstr remains markedly at its peak, suggesting that investor enthusiasm is declining,” Thielen said, explaining the bear spread.
Thielen Produced correctly BTC’s recent increase to six numbers.
Note that a similar divergence between Mstr and Bitcoin marked BTC’s top in November 2021.
Previous data does not guarantee future results, and the latest divergence between Mstr and BTC does not necessarily mean that Bitcoin’s Bull Run is over.
That said, it suggests to waive the enthusiasm of BTC among Tradfi investors. In addition, the Mstr bark, which was spread, could offer a hedge against a potential weakness in BTC.
“Bitcoin breaks records, but the strategy has stopping and the divergence matters. Retail still chases the dream, unaware that the right tail upwards may be gone. This is where the game changes: When the middleman runs out of premium and the engine stops,” Thielen said.
“Buying a strategy that is spread can be profitable, but it is also an effective hedge against a long Bitcoin position,” Thielen added.
