Bitcoin, the world’s most popular crypto currency, has experienced a period of stagnation, with its price oscillating between $56,552 and $73,777. This range-bound behavior, influenced primarily by the cash-and-carry arbitrage strategy, has created a highly volatile trading environment, leaving traders grappling with the challenge of predicting breakout directions.
Understanding the Cash-and-Carry Strategy
The cash-and-carry arbitrage strategy is a market-neutral approach that involves purchasing Bitcoin in the spot market (going long) and simultaneously selling its futures contract (going short) when trading at a premium.·
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