Analysis: Bitcoin Derivatives Suppression Unwinds, Price Discovery Mechanism Returns

BlockBeats News, December 26th, Glassnode co-founder Negentropic published a post stating that the current Bitcoin price structure is undergoing positive changes. The recent pullback continues to receive buying support, with the previous low point still holding up well, indicating that the overall market is showing a constructive trend.

One key structural change is that the derivative "deleveraging effect" has been mostly cleared. With the settlement of the largest-ever Bitcoin options expiration event, with a notional volume of approximately $23.6 billion, the price suppression driven by hedging behavior in the previous weeks is coming to an end.

Negentropic stated that prior to options expiration, market uptrends were often suppressed by mechanical hedging rather than real supply and demand. With relevant funds flowing out of the market, BTC is no longer "pinned," and the price structure is expected to be once again driven by the market itself, with the price discovery mechanism returning and the upward bias gradually strengthening.

From a macro perspective, he emphasized that the liquidity environment is still improving. The US M2 money supply has grown by 4.3% year-on-year, rising to a historic high of $22.3 trillion in November, marking 21 consecutive months of expansion, approximately $400 billion higher than the 2022 peak. Even after adjusting for inflation, real M2 is still growing by 1.5% year-on-year and has been rising for 15 consecutive months. The long-term trend remains clear—fiat currency dilution has not stopped, and macro and structural factors are creating a new tailwind environment for Bitcoin.