Purchases of put options on bitcoin increased as the world’s largest cryptocurrency by market capitalization fell under the $46,000 level in Asian hours on Thursday. shauryamalwa reports.
Purchases of put options on bitcoin increased as the world’s largest cryptocurrency by market capitalization fell under the $46,000 level in Asian hours on Thursday. Bitcoin failed to break the $51,000 resistance level earlier this week, implying more sellers than buyers in current market conditions.tracked
by Glassnode. This is unlike typical market behavior: Data from Glassnode shows most option volumes on crypto exchanges are generated on Friday, ahead of low-volume weekends. Nearly $1.7 billion in volume came from options powerhouse Deribit alone. Over 46,000 puts were purchased for Dec. 31, the firm noted in aOptions are hedging instruments that give the purchaser the right but not the obligation to buy the underlying asset at a predetermined price on or before a specific date. Puts allow investors to make profits on falling prices, while buying ‘calls’ allows profits on an upward move..
Option expiries are usually marked with market volatility ahead of their expiry date, as investors hedge their positions with spot or futures purchases, leading to a change in market dynamics.toward the “max pain” point in the lead-up to expiration and sees a strong directional move in days after settlement. Financial circles refer to max pain as the point where option purchases stand to lose the most money.
Bitcoin trades slightly about $46,926 at the time of writing, dropping over $3,500 after reaching a resistance level of $51,000 on Monday.
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