Bitcoin and the broader crypto market stayed resilient Monday as oil prices surged above $100, shaking Asian markets and triggering a drop in U.S. stock futures. The crypto calm may be shattered if bitcoin moves outside the $60,000-$75,000 range, data on major market participants’ positions suggests. It’s solidly within that range at the moment. The leading cryptocurrency by market value has risen over 3% since early Asian hours to trade around $68,000.
The rally followed a week of back-and-forth action that saw the price rise to nearly $74,000 only to drop back to $67,000 over the weekend. The CoinDesk 20 Index (CD20), ether (ETH), XRP (XRP), solana (SOL) saw similar increases. Nothing reflects the crypto calm better than BTC’s 30-day implied volatility index, BVIV, which remains steady around 60%. Bitcoin market makers — those entities tasked with creating order book liquidity and ensuring seamless trading — are “short gamma” at $60,000 and $75,000.
This means that if the market moves beyond those levels, they could trade in the direction of the price movement to rebalance their net exposure back to neutral. In other words, they may sell BTC as its price drops and buy when it rises, accentuating volatility. If we look at the Deribit GEX (gamma exposure chart) we see dealers are short a lot of gamma at the $60k level and the $75k levels … essentially the ceiling and floor of the box. Should markets actually trade beyond the box, negative gamma will make things worse from a dealer rebalancing perspective, Amberdata’s Director of Derivatives Greg Magadini said in an email.
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