Bitcoin $BTC$75,594.79 surpassed $75,000 early Tuesday, helped by changing dynamics in the derivatives market.
Prices reached a high of $75,800, convincingly surpassing the long-term resistance corridor between $73,750 and $74,400, which has reversed the price trend three times since 2024, according to CoinDesk data.
The so-called bullish breakout occurred when traders closed bearish short positions initiated during the early February selloff.
“In the case of Bitcoin, the recent move was largely driven by significant put selling around the $55,000 and $60,000 strike prices, with traders increasingly recognizing that these options are unlikely to expire in the money with just days to go. The unwinding of these downside hedges contributed to the latest bullish price action,” Markus Thielen, founder of 10x Research, said in a statement. note to customers.
A put option is a derivative contract that gives the right to sell the underlying asset, in this case, $BTCat a fixed price before a certain date. Traders buy put options when they think the price might fall or when they want to protect themselves against losses. It is essentially insurance against price declines, while a call option provides upside exposure.
Traders aggressively bought puts at $60,000 and below in early February as bitcoin crashed, reaching almost $60,000 on some exchanges. However, since then, market sentiment has stabilized, forcing traders to reevaluate their bearish positions.
The unwinding of these bearish bets also has second-order bullish effects.
“Selling or closing Bitcoin puts reduces downward covering pressure and forces market makers to buy. $BTC to rebalance their exposure, creating supportive flows that can push prices higher,” Thielen said.
CoinDesk warned last week that the rally could accelerate as prices approach $75,000, largely due to expected hedging activity from market makers.
So far, however, there has been no significant upside buying. This suggests that the move so far has been driven more by unwinding hedges than aggressive bullish positioning, Thielen explained.
Altcoins are soaring
Bitcoin’s rally has boosted the broader crypto market, with the CoinDesk 20 Index gaining 5% to 2,202 points over the past 24 hours.
Ether (ETH) gained nearly 8% to $2,360, helped by growing demand for bullish options bets. $XRP ($XRP) and solana (SOL) gained 8% and 4%, respectively.
Other notable artists include ZEC, PEPE, DOT and VIRTUAL.
