BlockBeats News, February 12th, 10X Research CEO Markus Thielen stated at the Consensus Hong Kong conference:
“After the November 2024 election, Bitcoin saw a rapid surge from $70,000 to $90,000 in just 10 to 12 days. During this process, the trading activity was very sparse, creating a significant gap, a liquidity void.
So when Bitcoin dropped to $87,000, it fell into this liquidity trap. What followed was: at the $75,000 level, there was a significant amount of negative gamma from options. This meant that market makers had to hedge and could only keep selling futures.
As the impact of the final negative gamma at $60,000 was absorbed, the situation turned into — ‘Okay, the last market maker has also completed the hedge, now we can reverse.’”
