How will Bitcoin's structure change after options pressure is relieved: What is the cryptocurrency market waiting for?

The cryptocurrency market has just experienced a significant phase as major derivative products withdrew from the market. According to analysis from Negentropic, co-founder of Glassnode, a major structural shift is occurring in Bitcoin valuation. As pressure from hedging activities in the derivatives market gradually subsides, the market’s price discovery mechanism has been reactivated.

How has the balancing effect from derivatives disappeared?

Analysis shows that previous mechanical hedging trades continuously suppressed upward price movements as Bitcoin options approached expiration. The most recent expiration saw a notional value of up to $23.6 billion, creating considerable downward pressure in the preceding weeks. However, as this capital exited, the “stabilizing effect” created by derivatives largely vanished. This means Bitcoin’s price will no longer be dominated by hedging trades but will revert to actual supply and demand in the market.

What signals does the reactivation of price discovery send?

The current market structure shows positive signs. Recent price corrections have been met with consistent buying by investors, while previous support levels have held firm. This reflects strong buying sentiment at lower price levels. The reactivation of price discovery is expected to once again establish a sustainable upward trend in the near future. Bitcoin is currently trading at $67,040, up 1.67% in the past 24 hours, reflecting a recovery from derivative pressures.

Improved liquidity conditions facilitate market growth

On the macroeconomic front, liquidity conditions continue to improve significantly. The US M2 money supply increased by 4.3% year-over-year, reaching a record $22.3 trillion, marking the 21st consecutive month of growth and surpassing the 2022 peak by $400 billion. Even after adjusting for inflation, real M2 still grew by 1.5% year-over-year, continuing a 15-month streak of expansion.

These data indicate a clear long-term trend: the ongoing dilution of fiat currency continues to create a more favorable macroeconomic environment for alternative assets like Bitcoin. Coupled with the disappearance of derivative pressures and the return of price discovery, the cryptocurrency market is ready for a new phase.