Navigating Bitcoin in a Sideways Market: Strategies for Income and Accumulation

Welcome to our Institutional Top of Mind with 10x Research, with our Macro Shifts series examining the forces reshaping the crypto landscape in 2025. Each analysis offers institutional investors a data-driven perspective on the regulatory environment, political influences, market infrastructure development, and macroeconomic drivers that matter most. Join us as we analyze these macro shifts through an institutional lens, providing deeper insights for sophisticated market participants navigating this rapidly evolving space.

Our latest issue explores Bitcoin's sideways market dynamics amid financial volatility and the Fed's pause, which create conditions for range-bound trading rather than sustained rallies. We focus on two strategic approaches – accumulator and options wheel strategies – that enable investors to generate income and build positions at favorable prices while managing downside risk. These methodologies offer disciplined frameworks for navigating uncertain market conditions without requiring directional bets on Bitcoin's next major move.

TLDR:

• Sideways Market Setup: With rising financial market volatility and the Fed on hold, Bitcoin will unlikely to get the monetary boost it needs, making a range-bound market the base case for now.

• Accumulator Strategy: Accumulators allow traders to buy Bitcoin at preset intervals and prices, ideal for sideways markets. However, they carry risk if Bitcoin drops sharply, as purchases are still made at the strike price.

• Options Wheel Strategy: This approach generates income by selling puts to potentially acquire Bitcoin at a discount and then selling calls to collect premiums—though it's capital-intensive and sensitive to volatility.

• Range-Bound Advantage: In uncertain markets, both strategies help traders manage risk and generate returns without betting on a big breakout—making them suitable for Bitcoin’s current environment

Exhibit 1: Bitcoin within well-defined channel, despite the volatility around tariffs

Financial market volatility has risen significantly in recent weeks. With the Federal Reserve likely to pause its interest rate cutting cycle for several months, Bitcoin may not receive the monetary stimulus it typically relies on to rally. However, in this environment—where Bitcoin is likely to trade sideways for the foreseeable future—traders can use two notable option strategies to their advantage. Below, we briefly outline the accumulator option strategy and the options wheel strategy, both of which are well-suited to range-bound markets.

Accumulator Option Strategy

Accumulators are structured financial products commonly used in options trading—including for Bitcoin—that help manage price risk over time. With Bitcoin currently trading around $82,000 (as of April 10, 2025), these instruments allow traders to buy or sell Bitcoin at a predetermined strike price across multiple intervals—such as daily or weekly—until the contract expires or a knock-out level is triggered.

The appeal of accumulator strategies lies in their ability to facilitate cost averaging while capitalizing on range-bound price action. For a highly volatile asset like Bitcoin, accumulators can be particularly effective for traders who expect sideways movement or a gradual pullback. For example, a trader might set a strike price at $80,000, expecting Bitcoin to remain at or below that level. As long as the price stays under $80,000, the trader accumulates Bitcoin at the agreed-upon strike—positioning themselves to benefit if the market price eventually moves higher. However, if Bitcoin breaks above a predefined knock-out level, such as $85,000, the contract may be terminated early, halting further accumulation and limiting potential upside.

If Bitcoin fluctuates between $80,000 and $85,000 over multiple intervals, this strategy enables the trader to repeatedly acquire Bitcoin at $80,000—effectively building a position at a discount. This makes accumulators especially attractive in range-bound markets, where a sharp breakout in either direction appears unlikely. Over time, this can result in a lower average entry price and a stronger position once market direction becomes clearer.

Exhibit 2: Bitcoin: 30-Day Rate of Change – Has Rarely Dropped Below -10%

Accumulators are attractive tools for cost averaging in range-bound markets, particularly given Bitcoin's inherent volatility. They enable traders to acquire Bitcoin at a lower average cost, provided prices remain within a defined range. However, these strategies also carry considerable risk: traders are contractually obligated to purchase Bitcoin at the strike price, even if the market drops significantly. For example, if Bitcoin falls to $70,000 while the strike price is set at $80,000, the trader is still required to buy at the higher price—resulting in immediate losses.

Option Wheel Strategy

The Options Wheel strategy is a popular, income-focused options trading approach that involves selling cash-secured puts and, if assigned, transitioning to selling covered calls on the acquired asset. For a volatile asset like Bitcoin—currently trading around $82,000—this strategy can capitalize on elevated option premiums, though it requires disciplined risk management due to price fluctuations.

The strategy begins with selling a cash-secured put, for example at a strike price of $80,000. If Bitcoin stays above that level, the option expires worthless, and the trader keeps the premium as profit. If Bitcoin falls below $80,000 and the option is assigned, the trader buys Bitcoin at the strike price—effectively lowering the cost basis thanks to the premium received. Once the asset is acquired, the trader sells a covered call, perhaps at $85,000, to generate additional income. If Bitcoin rises and the call is exercised, the trader sells the Bitcoin at $85,000. If not, they retain the asset and can continue writing calls, repeating the cycle to earn consistent premiums while managing their position over time.

This strategy takes advantage of Bitcoin’s volatility by generating high option premiums and can serve as a way to acquire Bitcoin at a discounted effective price. However, it is capital-intensive, as traders must have sufficient funds to purchase Bitcoin if assigned—typically $80,000 per contract for 1 BTC at the strike price. Key risks include sharp price declines, limited liquidity in Bitcoin options compared to traditional equities, and the absence of dividends, often a supplemental benefit when using similar strategies with stocks.

The Options Wheel strategy can be a powerful tool for Bitcoin traders, harnessing the asset’s high volatility to generate income through option premiums. Meanwhile, accumulator strategies offer a compelling way to cost-average into positions, particularly in range-bound markets. In periods of heightened uncertainty—like the current environment, where volatility is elevated but a parabolic move higher in Bitcoin seems unlikely—these strategies provide traders with structured approaches to manage their risk/reward profile.

In an environment where headline risks from tariffs and other macro factors dominate, the Options Wheel and accumulator strategies offer effective ways for traders to navigate sideways, volatile markets—allowing them to maintain exposure while generating consistent income.

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