Definition ∞ Put demand refers to the market interest in purchasing put options for a specific cryptocurrency. A put option grants the holder the right, but not the obligation, to sell an underlying asset at a predetermined price on or before a specific date. Increased put demand typically indicates a bearish market sentiment, as traders seek to hedge against potential price declines or speculate on downward price movements. It reflects a desire for downside protection.
Context ∞ Elevated put demand is often reported in crypto news as an indicator of investor caution or a potential impending price correction. Analysts monitor this metric to gauge the market’s collective expectation of future price action and risk aversion. A significant imbalance towards put options can signal underlying market weakness or a preparation for increased volatility.
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