Options market could now fuel a BTC rally, says 10x Research

The same options market mechanics that amplified Bitcoin's decline two weeks ago could now work in reverse to support a price increase, according to crypto research firm 10x Research. In a post on X, the firm noted that when Bitcoin fell below $70,000, a wave of mechanical selling for hedging purposes from the options market exacerbated the drop, pushing the price down to $65,705. However, the current market is different. A $1.8 billion negative gamma strike price has formed near Bitcoin's current price level, indicating that the options market is excessively undervaluing actual volatility. "This has created an environment where the options market could contribute to a rebound," 10x Research explained. The firm added that improving investor sentiment, driven by easing geopolitical risks amid hopes for a U.S.-Iran peace agreement and a dovish outlook on the Federal Reserve's monetary policy, could also play a role. If Bitcoin's price begins to rise, it could trigger mechanical buying from the options market, further amplifying the upward momentum.