Trading Desk Insights
Bitcoin’s sharp drop from the $77k area toward $60k was not driven by macro pressure alone. While ETF outflows and broader risk-off sentiment set the stage, market-maker positioning in the options market likely amplified the move. Dealers were heavily short gamma between $60k and $75k, meaning they had to sell spot and futures as price fell to stay hedged, intensifying downside momentum.
The move became self-reinforcing. As BTC broke below key strikes in the mid-70s, market makers were forced to sell into weakness. That additional supply pushed price lower, which in turn required further hedging. This type of negative-gamma environment can accelerate moves without necessarily reflecting panic or forced liquidation from long-term holders.
Price action through the decline reflected that structure. Liquidity remained functional and orderly, but the lack of strong dip-buying allowed dealer hedging flows to have an outsized impact. Roughly $1.5B in negative gamma exposure sat between $75k and $60k, creating a zone where hedging pressure likely compounded the fall.
Importantly, these dynamics can reverse. Once the final large gamma cluster near $60k was triggered and absorbed, the need for aggressive dealer selling eased, helping explain the sharp rebound that followed. Market-maker hedging does not dictate direction on its own, but in volatile conditions it can accelerate moves in either direction.
From a market-structure perspective, the episode highlights how influential bitcoin’s options market has become. When dealers are short gamma near key levels, volatility tends to expand and price moves can feed on themselves. Stabilization above major strikes reduces that pressure, while breaks below them can quickly open the door to sharper downside.
Crypto Charts
ETF Flow
Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
Unless otherwise provided in a separate agreement, Secure Digital Markets does not represent that the report contents meet all of the presentation and/or disclosure standards applicable in the jurisdiction the recipient is located. Secure Digital Markets and their officers, directors and employees shall not be responsible or liable for any trading decisions, damages or other losses resulting from, or related to, the information, data, analyses, or opinions within the report.
Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
Contact Us
Sign up to receive more exclusive market coverage:
Start trading with Secure Digital Markets today by e-mailing:
trading@securedigitalmarkets.com