In a context of confidence among buyers, that strategy emerges for those looking for an intermediate point to make gains. In the case of crashes caused by volatility, fees, and coin burning, limits on losses below USD 2,500 would provide a less expensive outflow of holdings.
Amid the uncertain outlook for cryptocurrency prices, the Iron Condor strategy would be an option among current trades. Moderate buying and selling limits would allow dealing with volatility, bringing in profits subject to lower risk.
Disadvantages Posed by the Current Season
The crypto market is in a bearish run, which worsened when Bitcoin began to decline in early 2022. The Ethereum cryptocurrency, Ether (ETH), was not far behind, registering a drop of over 40% in just a few months.
This event could lead traders to look for a space in call options to expect some profit. However, the situation becomes complex in a context where there is a lack of confidence among buyers. The Iron Condor strategy emerges amid a distrust in positions, aiming to find an intermediate point to make gains.
The high transaction fees on the Ethereum network and issues concerning scalability contributed to the depreciation of ETH.
Traders might consider an upcoming bullish scenario to recover their holdings in the market. However, there is a significant percentage growth, which would make it hard to achieve high yields before May.
Since ETH is trading below USD 2,600, the price of some bullish positions is up to around USD 4,000. However, buying those with wide gaps at the current price would be very risky for delivery. The Iron Condor strategy involves selecting a more secure level to obtain benefits.
Limits on Losses below USD 2,500
To apply the technique, traders need to choose a reasonable level concerning the market movement. Call options would thus be below USD 4,000, somewhere between USD 3,600 and USD 3,800.
Given that ETH might show highly volatile performance, it is crucial to have a loss margin in mind.
The price of Ether has not yet advanced above USD 2,600 to move toward USD 3,000, and even USD 3,200. However, if momentum builds up before the May delivery, the Iron Condor strategy will mark a safer limit on buying and selling.
Investors may anticipate a potential crash caused by the volatility of purchases and the different perspectives of the market on fees and coin burning. Besides, setting limits on losses just below USD 2,500 would provide a less expensive outflow of holdings.
Professionals foresee an uncertain scenario, which makes it impossible for the price of ETH to rise to USD 4,000 in the short term. That strategy does not guarantee the highest yield but balances volatility with a modest profit margin.
Ether is trading at around USD 2,814 and has accumulated a 3.4% gain in the last 24 hours. Its daily trading volume is above USD 13.96 billion, and its market capitalization is about USD 337.70 billion, according to CoinGecko.
By Alexander Salazar
