10X Research: Bitcoin Reenters Liquidity Trap as $60K Gamma Signals Reversal

Bitcoin’s value dropped sharply last month, hitting $60,000, wiping billions off the market. According to Markus Thielen, founder of 10x Research, this was driven by the Bitcoin liquidity gap created after the 2024 U.S. election rally.

Thielen noted that the quick surge from $70,000 to $90,000 post-election, with thin trading volume, created a liquidity vacuum zone. He explained that as Bitcoin fell below the $75,000 level, market makers were negative (short) gamma, which forced them to sell BTC to hedge risks, pushing the price further.

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How Bitcoin’s Liquidity Trap and Gamma Pressure Point to a $60K Reversal

Thielen had insights for investors concerned about the recent price moves and BTC price reversal. In a note to clients, Markus Thielen shed light on what triggered the massive price drop,

“The presence of approximately $1.5 billion in negative options gamma between $75,000 and $60,000 played a critical role in accelerating Bitcoin’s decline and helps explain why the market rebounded sharply once the final large gamma cluster near $60,000 was triggered and absorbed.”

Thielen added what negative gamma meant and how it played a major role during the recent Bitcoin liquidity gap,

“Negative gamma means that options dealers, who are typically the counterparties to investors buying options, are forced to hedge in the same direction as the underlying price move. In this case, as Bitcoin declined to the $60,000–$75,000 range, dealers became increasingly short gamma, which required them to sell bitcoin as prices fell to remain hedged.”

Talking about BTC price reversal, Thielen said that the last wave of negative gamma appears concentrated near the $60,000 mark. If absorbed, this could lead to market stability, and the price may even rise from the current levels. He said,

“As the last wave of negative gamma impact is digested at $60,000, the market situation may reverse.“

If we go by Markus Thielen’s analysis, the recent events cannot be classified as sentiment-driven selling but are more closely linked to the Bitcoin liquidity trap and gamma pressure.

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Currently, Bitcoin is trading between $66,000 and $70,000, above the key BTC $60K support level. Analysts and traders are closely watching prices in anticipation of a market bounce-back alongside a BTC price reversal.