🕯👀 Pay attention to the spike in options volume during the decline $BTC .
This is a classic market reaction, and options here serve as both a 'shield' and a 'sword'.
When the price falls, activity increases due to three key mechanisms:
▫️Hedging (Insurance): Asset owners massively buy Put options. This gives them the right to sell BTC at a predetermined price, even if the market crashes further down. It's like an insurance policy for the portfolio.
▫️Position closing: A sharp price change forces market makers to dynamically rebalance their portfolios (gamma hedging), creating additional volume.
▫️Speculative leverage: Unlike futures, where a sharp move can instantly liquidate a position, options allow betting on further declines (or a quick rebound) with fixed risk — only the amount of the premium paid.
In general, such anomalous activity on the chart often indicates 'capitulation' or the arrival of large players preparing for a reversal or price stabilization.
