Analysis: The Options Mechanism That Crushed Bitcoin's $70K Support Is Reversing, Market May Be Poised for a Rebound

Odaily reported that 10x Research pointed out that the options market mechanism that drove Bitcoin below the $70,000 support level is changing and may even shift to fueling upward momentum. After BTC fell below $70,000, the negative Gamma effect in the options market amplified the decline. Gamma-short market makers were forced to sell during the drop, turning a normal pullback into a cascade of liquidations, with Bitcoin hitting a low of $65,705. Now, this mechanism has not disappeared but has shifted to a new critical level.

At present, the largest negative Gamma position in the Bitcoin options market is located near the current spot price, corresponding to a scale of approximately $1.8 billion. If the price fluctuates, market makers' hedging activities could once again amplify the price movement. Driven by factors such as improving market sentiment indicators, the potential for an Iran-related agreement to reduce inflation risk premiums, and market expectations that the new Federal Reserve chair will adopt a more dovish stance, the options structure that previously caused Bitcoin's decline may now be transforming into a force driving a rebound.