10X Research CEO Markus Thielen, in his assessment at the Consensus Hong Kong conference, drew attention to the liquidity dynamics behind the sharp movements in Bitcoin (BTC).
Thielen, recalling that Bitcoin rose from $70,000 to $90,000 in just 10-12 days following the November 2024 elections, noted that this rally occurred in an environment of “extremely weak trading volume.” According to the analyst, a large liquidity gap emerged in the market during this period.
Thielen noted that the price subsequently fell into this liquidity gap when it dropped to the $87,000 level. At this stage, he stated, a strong negative gamma formed in the options market around the $75,000 level.
Thielen stated that in a negative gamma environment, market makers were constantly forced to hedge to offset their risks, which in practice meant: “Market makers had to sell in the futures market to hedge against risk, which increased selling pressure and accelerated the decline.”
According to Thielen, the recent negative gamma shock was absorbed at the $60,000 level. He argued that at this point, market makers had completed their hedging transactions and the selling pressure had technically ended.
“Once the last market makers completed the hedging operation, a reversal became possible,” said Thielen, noting that this level represents a critical equilibrium point in terms of market structure.
According to the analyst, the process has once again demonstrated that Bitcoin price movements are determined not only by macroeconomic factors and news flow, but also by gamma dynamics and liquidity structures in the options market.
*This is not investment advice.
