BlockBeats News, November 21st, On-chain data analyst Murphy issued a warning, based on Bitcoin’s Unrealized PNL Distribution (URPD), the real largest sell-off range in the past three days was in the price range of $88,000 – $89,000, with a total of 64,334 BTC sold. The most stacked chip range did not see a large amount of selling. The current market downturn is mostly attributed to the “whale dumping” of chips bought at recent highs, while profit-taking chips and high trapped chips are not the main sellers. The analyst believes that some of the sell-off is due to short-term/high-frequency funds being forced to liquidate, but the larger reason is the trading mechanism of derivatives market makers amplifying short-term volatility.
The Options Net Premium Heatmap shows that there is a large amount of Put selling in the current $82,000 to $87,000 range. When BTC approaches $82,000, market makers are forced to buy BTC due to the trading mechanism to establish a “bottom support structure.” However, once it significantly drops below $82,000, market makers’ “risk exposure” will become significant, requiring rapid “selling” of BTC for hedging. The analyst believes that $82,000 is the current longs’ lifeline, and if it falls below $82,000, market makers will further sell spot to hedge, leading to a cascade of accelerated declines.
