I just noticed an interesting options market signal—Bitcoin $40,000 put options have become the second-largest options bet before the February expiration next Tuesday. This indicates that there are still quite a few people preparing to short or at least hedging against risks in the market.

This data does a pretty good job of explaining things. Even though BTC has recently risen to over $72K, judging by the activity in the options market, people’s concerns about the outlook haven’t completely disappeared. With put options open interest so high, it means either hedge funds are protecting their positions or retail traders are betting on a pullback. Either way, this kind of put option enthusiasm often suggests that market participants are paying close attention to downside risk.

There should be a fair amount of volatility before the February expiration next Tuesday. This kind of options data is actually a great reference—it shows where institutions and traders’ true risk appetite lies.