Bitcoin ’Short Strangle’ Strategy Gains Traction as Markets Signal Near-Term Calm: 10x Research

Bitcoin traders are flipping the script—opting for sophisticated options plays as volatility takes a breather.

The Strategy Shift

Instead of chasing pumps or panic-selling, sharp players deploy the 'short strangle.' This advanced move sells both call and put options, banking on Bitcoin staying range-bound. No wild rallies. No catastrophic crashes. Just boring, beautiful sideways action.

Why It Works Now

Market indicators scream complacency. Fear and Greed Index? Neutralized. Derivative metrics? Cooling off. Even perpetual funding rates normalize. Everyone’s waiting for the next catalyst—whether it’s ETF inflows, regulatory clarity, or another Elon tweet.

The Ironic Twist

Here’s the kicker: crypto’s ‘calm’ often precedes a storm. Traders profit from stability until… they don’t. Because when Bitcoin moves, it moves fast—leaving overconfident strangle-sellers scrambling. Classic finance: make steady gains until one trade wipes months of progress.

Stay nimble, stay skeptical, and maybe—just maybe—keep some dry powder for the inevitable explosion.

Risk-reward profile

BTC needs to continue trading between $95,000 and $125,000 for the suggested strategy to generate profits. The rangebound trading will reduce the demand for OTM calls and puts, thereby draining premium from these options and generating a profit for strangle sellers.

Thielen’s previous recommendation from early August was also a short strangle, involving a $105,000 put and a $130,000 call. This strategy generated a yield of 3.5%.

Note, however, that short strangles carry significant risks, particularly in the event of a sudden spike in volatility, which can lead to substantial losses. Therefore, traders must continuously monitor the position and relevant market variables to manage risk effectively.