As Bitcoin surpasses $59,000 for the first time since December 2021, investors and analysts expect BTC to surpass its previous ATH of $69,000.
At this point, analysts say that increasing institutional demand, the upcoming halving event and spot Bitcoin ETF entries are effective in the BTC rise, and that they expect this rise to continue.
Although the common expectation among analysts and investors was bullish, some investors sought protection against a potential price pullback.
Singapore-based crypto options data platform Greeks.live said some traders have started buying put options below $50,000 to hedge against possible sharp declines in Bitcoin.
Drawing attention to the increase in funding rates at this point, Greeks.live stated that traders started buying put options on Bitcoin, as funding rates indicate an overheated market and could witness a downward correction of more than 10 percent.
“Whales are likely buying a lot of puts (put options) on BT below $50,000 to hedge their spot Bitcoin profits.
Put options give the buyer the right, but not the obligation, to sell the underlying asset at a predetermined price on or before a certain date.
The put buyer has an implicit bearish position in the market and seeks to hedge a downside risk on a long position in the spot or futures market with a put option.”
Bitcoin continues to trade at $59,045 at the time of writing.
*This is not investment advice.