10X Research: The current market is primed for a rebound, with this recent drop attributed to market makers selling futures in a liquidity trap
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.’”
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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