Analysis: Traders are buying a large number of put options for Bitcoin and Ethereum, indicating that the market is hedging against potential downside risks

ChainCatcher news reports that after last Friday's liquidation wave, options market investors are preparing for potential further volatility and declines in Bitcoin and Ethereum, actively positioning themselves for a new round of protective positions against potential crashes. Sean Dawson, research director at Derive.xyz, stated that volatility surged across the board last Friday, with market sentiment regarding short-term volatility showing increased concern over downside risks.

Data shows that traders are heavily buying "put options" for Bitcoin and Ethereum, indicating that the market is hedging against potential downside risks. In the Bitcoin market, there has been significant buying of put options with strike prices of $115,000 and $95,000, expiring on October 31, while the $125,000 call options expiring on October 17 have shifted from buying to selling, reflecting a pessimistic short-term outlook.

Nick Foster, co-founder of Derive.xyz, noted that traders are focusing on options with strike prices of $4,000 (expiring on October 31) and $3,600 (expiring on October 17). He also observed significant buying of put options with a strike price of $2,600, expiring on December 26, indicating that bearish sentiment is expected to persist until the end of the year.

Nic Puckrin, co-founder of Coin Bureau, stated, "The good news is that this crash has cleared excessive leverage and temporarily reset market risks, but Bitcoin now faces another battle: it must break through key resistance levels to achieve a meaningful new all-time high this year."