Mounting activity at lower strike prices is signaling stronger demand for downside hedging in bitcoin as traders respond to the recent steep correction.
The $40,000 put option has become one of the most heavily concentrated strikes ahead of the Feb. 27 expiry, reflecting growing appetite for protection against further declines. Put options grant holders the right, but not the obligation, to sell bitcoin at a fixed price before expiration, effectively acting as insurance if the market falls below the strike.
Open interest at the $40,000 level stands at roughly $490 million in notional terms, making it the second-largest strike in the market. The sizable positioning highlights concern about tail risks. Bitcoin has dropped as much as 50% from its October high and is currently trading near $66,000, prompting traders to recalibrate exposure and layer in protective structures.
According to data from Deribit — the Dubai-based derivatives platform owned by Coinbase — approximately $7.3 billion in bitcoin options notional value is scheduled to expire at the end of the month.
Elsewhere on the board, around $566 million in open interest is clustered at the $75,000 strike, which also represents the “max pain” level — the price at which the greatest number of options contracts would expire worthless, minimizing payouts to buyers. With spot prices below $75,000, a rally toward that level into expiry could ease pressure on call writers.
Although calls still outnumber puts overall — 63,547 call contracts versus 45,914 puts — positioning is not purely bullish. The put-to-call ratio of 0.72 suggests upside exposure remains dominant, yet the heavy concentration of puts at lower strikes underscores clear demand for downside insurance.
In effect, traders are maintaining exposure to a potential rebound while simultaneously guarding against the risk of another sharp downturn.
