(Bloomberg) — Options suggest some traders may have already started hedging against a possible decline in Bitcoin after the native cryptocurrency rose above $100,000 for the first time.

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Demand has increased for puts, or contracts that give the buyer the right to sell an asset at a predetermined price within a set lock-in period. According to Amberdata, which tracks digital asset market data, puts with strike prices of $95,000 and $100,000 recorded the largest open interest in the last 24 hours. Demand for puts in the $75,000 to $70,000 range has also increased.

“If we break it down by expiration, we can see that open put interest is mostly concentrated in late December and late January, with some also in late February, which would be logical to hedge this big uptrend against any corrections or surprises. said Luke Nolan, research associate at crypto asset manager CoinShares.

According to Deribit, while put positions are concentrated around expirations early next year, total open interest on these contracts is still small compared to open interest on calls expiring in the same period.

Late on Wednesday, Bitcoin finally broke the $100,000 price mark. The reason for this was optimism that President-elect Donald Trump’s selection of a digital assets proponent as the next head of the U.S. Securities and Exchange Commission will push crypto further into the mainstream. Market leader Bitcoin is up around 50% since last month’s election.

Crypto traders continue to make leveraged bullish bets after multiple failed attempts to reach $100,000 in recent weeks.

The funding rate, a key indicator for measuring leverage in the crypto market, is nearing an all-time high. This figure shows that traders are willing to pay high premiums to extend their bullish bets through perpetual futures contracts. This is one of the most common ways for investors to double down on a directional move in Bitcoin prices.

“Bitcoin’s recent surge above $100,000 has sparked a significant increase in funding rates and is approaching March’s annual high and Q4 2021 all-time high,” said Brian Strugats, head of trading at crypto prime broker FalconX. “The pattern mirrors previous bull markets where such spikes in funding rates are accompanied by strong price momentum, reflecting high demand for leveraged positions.”

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