ChainCatcher reported that 10x Research has published a note saying the options-market mechanism that previously helped drive Bitcoin below the $70,000 support level is now changing. According to the firm, the same structure that once intensified the sell-off may even be shifting into a force that supports an upside move. The focus of the note is the negative Gamma structure in the Bitcoin options market and the way dealer hedging can magnify spot-price movement when price trades near key positioning levels.
The negative Gamma chain after the $70,000 break
10x Research said that after BTC fell below $70,000, the negative Gamma effect in the options market amplified the decline. At that time, market makers who were short Gamma were forced to sell as the market moved lower in order to hedge their exposure. Those hedging flows turned what had been a normal pullback into a sequence of liquidations, with Bitcoin falling as low as $65,705.
The firm added that this mechanism has not disappeared. Instead, it has moved to a new key area. In other words, the options structure that previously accelerated downside pressure remains present in the market, but its point of influence has shifted away from the former $70,000 support zone and is now tied more closely to positioning around the current spot price.
About $1.8 billion in negative Gamma sits near spot
At the current stage, the largest negative Gamma position in the Bitcoin options market is located near the present spot price, with a corresponding size of about $1.8 billion. 10x Research said that if price volatility emerges again, hedging by market makers may once more amplify the move. This keeps the internal positioning structure of the options market as a relevant factor in short-term Bitcoin price action.
10x Research also cited several factors that are changing the direction in which this options structure may operate: improving market sentiment indicators, an Iran-related agreement that may reduce the inflation risk premium, and market expectations that a new Federal Reserve chair will take a more dovish stance. Based on the firm’s wording, the same options setup that previously contributed to Bitcoin’s decline may now be turning into a force that helps drive a rebound.