President Donald Trump’s renewed aggressive stance towards Iran has caused bitcoin to fall by around 2% over the past 24 hours, taking it to $67,000. While this price action is consistent with routine volatility, the market structure appears fragile beneath the surface.
This is primarily due to flows into the options market listed on Deribit, particularly a build-up of defensive positions just below current prices, which could result in a fall to as low as $50,000.
A fragile setup below $68,000
In recent weeks, traders have massively positioned themselves on put options offering downside protection. These defensive moves primarily focused on puts with strike price levels of $68,000 and below, up to around $55,000. This trend is understandable, given the macroeconomic risks related to the war in Iran, quantum threats and the brutal bear market that began late last year.
However, when this type of positioning develops, it creates what savvy traders call a “negative gamma” zone – a setup where market makers or brokers who add liquidity to an exchange’s order book are forced to react to price movements in a way that accelerate the dominant trend, which is bearish in this case.
These types of dynamics have amplified both bullish and bearish trends in the past.
Glassnode’s chart shows that market makers’ gamma exposure is mostly negative between $68,000 and $50,000. This is because they are the opposite of traders’ long put options positions.
In other words, market makers hold short positions in put options. So when the market drops below $68,000, they incur losses and are likely to short BTC to cover their exposure.
This hedging can drive prices down even further, creating a feedback loop, which can accelerate quickly.
This is why the final drop below the $68,000 level becomes crucial. Breaking this threshold not only signals technical weakness — it opens the door to an area where forced selling could intensify.
“Negative gamma is now building just below current price levels from $68,000 to the highs of $50,000,” Glassnode said in its weekly report.
“A foray into this zone could trigger an acceleration in selling as hedging flows reinforce bearish momentum, transforming what would otherwise be a gradual move into a more rapid adjustment, with a possible revisit to the $60,000 level, the low of the February 5 fall,” the firm added.
With liquidity still relatively low following the March 27 options expiration, and expected to remain tight through the Easter holiday, there may not be enough buyers to absorb this pressure.
So, if the feedback loop fully engages, the decline could extend well below $60,000.
This pattern shows that while bitcoin is currently reacting to war-related headlines, internal market mechanisms can also influence its trajectory.
If prices hold above $68,000, the current pattern could unravel without much damage. But a sustained break below that level could reverse the market into a regime where selling feeds on itself, turning a simple decline into a much deeper move.
