Bitcoin‘s (BTC) price today has risen above $59,000, achieving a significant 40% increase in just four weeks. According to data compiled by the crypto analysis platform Greeks.Live, this rapid ascent has prompted some investors to take measures against a potential sharp decline.
“Block Reward Halving Rally” Excitement
The recent surge in Bitcoin‘s price has led to a major upward movement across the cryptocurrency market. Experts believe that the current market rally is part of a trend that typically occurs weeks before the block reward halving, which will cut the Bitcoin block reward miners receive by 50%.
The largest cryptocurrency’s 4th block reward halving is expected to take place in April, and this event will reduce the new BTC issued by 50%, down to 3.125 BTC.
Investors Buying Bitcoin Puts
Despite the general uptrend caused by the block reward halving and high inflows into US-based exchange-traded funds (ETFs), some investors have started to engage in protective measures against the possibility of a harsh market correction. Accordingly, investors are purchasing Bitcoin puts, which are option contracts that allow selling the underlying asset at a predetermined price, offering protection in case of a decline.
According to Greeks.Live, there has been significant activity in the options market, particularly in the last 24 hours, with large block orders exceeding a nominal value of $5 million. Many of these orders consist of trades with strike prices below $50,000, indicating a movement among large Bitcoin investors to hedge their profits against potential downside risks.
While the strategy of buying put options as a hedge against market downturns is relatively rare, it is not unheard of. This tendency, which usually emerges during strong bull markets, allows investors with large holdings to protect their gains while still benefiting from potential price increases.
