The pricing changes of BTC downside risk in the market In the options market, buying a put is a way for investors to insure against potential downside risks. Therefore, in the absence of significant changes in price structure, when the premium paid for buying Put drops significantly, it often means that the market's panic about "short-term rapid decline" is easing. From the two time points marked in Figure 1: Buy Put ≈ $60.78 million (7d SMA) on November 24th; Purchase Put on December 14th for approximately 15.65 million US dollars. This is an order of magnitude decline, which at least indicates one thing: the market's willingness to pay for short-term declines has clearly weakened compared to the end of November. (Figure 1) But this does not mean that the 'bearish logic has disappeared', it is more likely that there has been a change in hedging methods. As the BTC price rebounds after hitting around $80000, price acceptance gradually forms below, and volatility decreases. The cost-effectiveness of continuing to spend high premiums on Put rapidly decreases, so the market will choose not to buy or buy less Put. But the true core signal of whether there is a new pricing change for BTC's downside risk among investors is not how much Put has been bought, but whether there are already people willing to sell Put. (Figure 2) Therefore, the data in Figure 2 is particularly crucial. We have seen a large amount of put sales at $85000 in the past 24 hours, indicating that the market is actively lowering the probability of BTC falling below 8.5w. Translated into "trader's language", it means: as long as BTC is above $8.5w when the exercise expires, the $4.33 million premium will be earned for nothing. That is to say, with funds starting to bet: 8.5w is a position that is likely to be held even if tested. (Figure 3) Based on the direction of net premium in the exercise price range and the timing of the exercise date, the market is concerned that BTC will fall below $80000 during the exercise on December 19th, so they are all buying put at 80000 (which happens to be the time when the Bank of Japan raises interest rates); On the 26th, a larger scale exercise was conducted, with a put of 8.5w, indicating that the market believes that BTC prices will be above $85000 at this point in time. Based on the above sets of data, we can summarize briefly: 1. At the end of November, investors' panic was reflected in pricing the downside tail risk by buying a large amount of Put; 2. With the rebound of prices and the decrease in volatility, the demand for buy put (buy protection) has significantly decreased. 3. The occurrence of a large number of put trades at $85000 indicates that traders are repricing the downside risk of BTC. ---------------------------------------------- This article is sponsored by @ Bitget | Bitget VIP， Lower rates and more generous benefits