Bitcoin opened the month with a sharp sell-off, continuing where it left off in January. The largest cryptocurrency briefly slid toward the $60,000 level a few days after changing hands at $90,000. The drop impacted the broader crypto market valuation and led to a wave of liquidations across leveraged positions.
At first glance, the weakness appeared to be a typical macro-driven move. Some pointed to cautious risk sentiment, while others noted selling from spot ETF holders. However, market makers may have played an equally important role in the recent price adjustment.
How Market Makers Added Pressure to the Bitcoin Crash
Market makers are the participants who constantly place buy and sell orders on exchanges. Their job is to keep liquidity flowing so market users can enter and exit positions without significant delays or sharp price gaps. They usually capture the small difference between the bid and ask price rather than trying to predict the market’s direction.
To stay neutral, they hedge their exposure by buying or selling Bitcoin or related derivatives. But during periods of high volatility, those hedges can unintentionally amplify price swings.
According to Markus Thielen of 10x Research, this dynamic likely played out between Feb. 4 and Feb. 7, during which Bitcoin dropped from about $77,000 to near $60,000. Many options dealers were “short gamma” in the $60,000 to $75,000 range. In simple terms, they held options positions that required them to sell more BTC as the price fell in order to manage risk.
As Bitcoin slipped below $75,000, these firms had to sell spot or futures contracts to rebalance. That additional selling pressure contributed to the decline and created a technical loop in which falling prices triggered more hedging and subsequent selling.
Options Market Influence Is Growing
Thielen estimates there was roughly $1.5 billion in negative gamma exposure across that price band. This cluster may explain why the decline accelerated and then stabilized once the selling pressure was absorbed near $60,000.
This type of behavior is common in traditional markets, but it is becoming more noticeable in crypto as the options market grows. When dealers are short gamma, they tend to move in the same direction as the market, which can intensify both corrections and rallies.
It is also not always bearish. In late 2023, similar positioning above $36,000 led market makers to buy as prices climbed, supporting Bitcoin’s move past $40,000.
For now, the recent episode shows that Bitcoin’s price is no longer driven only by sentiment and headlines. The structure of the derivatives market is increasingly shaping the momentum and range of the asset’s movements.
Where Whales Are Reallocating To
While Bitcoin faces these technical hurdles, some large-scale holders are reallocating toward emerging projects. Recent market observations point toward Minotaurus (MTAUR), a project that presents notable growth prospects within its niche.
MTAUR is the native token of Minotaurus, a blockchain-based game in which players explore intricate mazes, battle enemies, and collect treasures. Currently priced at 0.00012663 USDT, Minotaurus offers a specialized entry point for those looking to accumulate tokens based on its projected trajectory.
For instance, an acquisition of approximately 790,000 MTAUR at current rates could see its value reach nearly 10,000 USDT if MTAUR hits the 0.012 USDT mark, reflecting a significant expansion in performance.
This project is drawing attention as a potential addition to diversified portfolios; interested participants can explore MTAUR before the next phase of its distribution begins.
The information presented in this article is for informational purposes only and should not be construed as investment advice. Crypto Economy is not affiliated with the project. The cryptocurrency market is highly volatile and can involve significant risks. We recommend that you conduct your own analysis.
