Today’s $300 Million Gamma Expiry Could Trigger Bitcoin’s Next Major Movement | US Crypto News

Welcome to the US Crypto News Morning Briefing—your essential guide to the key developments in cryptocurrency for the day ahead.

Key Takeaways

Bitcoin is currently held below $90,000 due to a $300 million gamma trap affecting its price movement.
Gold’s recent climb suggests a market shift towards safety, while Bitcoin typically reacts later.
The expiry of significant options today could lead to increased volatility in Bitcoin’s price as it breaks free from its current range.
The divergence between Bitcoin and gold may reflect broader economic stresses but is viewed by many as a temporary condition rather than a sign of decline.

As you sip your coffee, take note: while gold climbs to new heights, indicating a shift towards safety, Bitcoin remains stuck below $90,000. The $300 million options structure has limited volatility, but following this major expiry, we may soon witness significant price fluctuations.

Today's Focus: Bitcoin’s Gamma Situation After Options Expiry

Gold has recently reached new highs, breaking through a long-standing ceiling and reinforcing its role as a market indicator during times of capital reassessment. In contrast, Bitcoin, the largest cryptocurrency, remains below the $90,000 mark.

Insights indicate that this stagnation isn't necessarily due to a weakening demand but rather the influence of a substantial derivatives structure that restricts price movement. Analyst Crypto Tice notes, “Gold made the first move. Bitcoin is still loading.”

This analyst explains that gold’s breakout often signifies the beginning of liquidity repositioning, while Bitcoin usually reacts later, returning to life once investors regain their risk appetite. “Gold tends to move first when liquidity seeks safety. Bitcoin follows when risk appetite turns back on,” Tice adds, pointing out that these compressed phases typically don’t end gradually but rather result in dramatic shifts that can reset the entire market cycle.

This perspective aligns with a recent analysis from BeInCrypto highlighting how gold's increase often paves the way for Bitcoin's ascent.

In Bitcoin’s current situation, the compression is influenced by what derivatives experts refer to as a $300 million "gamma trap." According to market analyst David, Bitcoin is currently “mechanically trapped in a narrow range” due to significant options positioning.

The downside is held steady by an $85,000 put wall with nearly $98.8 million in put gamma, while an upside limit exists at a $90,000 call wall containing around $36.2 million in call gamma. This positioning creates what is referred to as a negative gamma feedback loop.

David notes that when Bitcoin rises towards this upper range, dealers who hold long calls must sell spot Bitcoin to hedge their risk. Conversely, when the price slides down to the lower end, these dealers must buy to hedge their puts. “The result: Price is effectively locked in a cage,” he asserts, underscoring that current market dynamics are not influenced by sentiment or news but by the "mathematical necessity of dealer hedging."

Will Today’s Gamma Expiry Spark Bitcoin’s Next Major Movement?

This current stability is expected to be short-lived. Roughly $300 million worth of gamma—about 58% of the total gamma complex—expired in a single options event earlier today. David describes this scenario as a “pin release,” cautioning that once the expiry occurs, the conditions that have kept Bitcoin contained between $85,000 and $90,000 will vanish almost immediately.

Historically, such releases often lead to sharp, sudden price moves as the market seeks to find a new balance.

A key level to watch is the so-called gamma flip, located at $88,925, slightly above Bitcoin’s present price of $88,724 as of this writing.

Should Bitcoin maintain a position above this threshold, it could shift dealer actions from dampening to amplifying price movements, potentially requiring them to buy into strength rather than offload during market rallies.

Broader Market Conditions: Bitcoin vs. Precious Metals

The divergence seen between gold and Bitcoin is occurring alongside a challenging macroeconomic environment. Economist Mohamed El-Erian recently pointed out that gold has surged by over 40% this year, marking its best performance since 1979, while Bitcoin has decreased approximately 20% year-to-date after reaching its peak earlier in the cycle.

At the same time, various analysts have warned that a coordinated rally encompassing gold, silver, copper, and energy markets historically signifies rising systemic stress. This aligns with a recent study suggesting that the current metals rally might indicate underlying turbulence.

Nevertheless, many crypto enthusiasts view Bitcoin’s current stagnation as structural rather than indicative of negative trends.

With the gamma trap nearing expiry and gold already displaying signals of systemic stress, Bitcoin’s prolonged stabilization may be preparing the ground for its next significant movement.

Chart of the Day

Gold (XAU) and Bitcoin (BTC) Price Performances. Source: TradingView

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