Bitcoin Charges Toward $115K, But Market Makers May Temper Rally

Bitcoin (BTC) continues to break new ground, soaring above $111,000 early Thursday, as growing institutional interest propels the market. However, experts caution that an “invisible hand”—the hedging strategies of market makers—could slow BTC’s climb near the critical $115,000 level.

During Asian trading hours, BTC surged 3.5% to nearly $111,900, pushing overall market cap higher. According to Alexander S. Blume, CEO of investment advisor Two Prime, the surge may be fueled by dwindling over-the-counter (OTC) supply, a dynamic not always visible in exchange or derivatives data.

“Corporate treasuries are buying bitcoin in large quantities OTC, and there are whispers of sovereign-level demand,” Blume noted. “If OTC liquidity tightens, the market could experience heightened volatility as more buyers compete for limited BTC.”

Ryan Lee, chief analyst at Bitget, remains optimistic about Bitcoin’s trajectory, forecasting a potential $180,000 price target by year-end. He cites strong ETF inflows, reduced supply growth after the halving, and increased institutional adoption as driving forces.

“The recent downgrade of the U.S. credit rating by Moody’s to Aa1 has renewed investor appetite for BTC and ETH as safe havens against fiat risk,” Lee explained. “Bitcoin’s resilience above $103,000 amid choppy markets signals a shift toward digital assets as strategic reserves.”

Hedging Pressure Near $115K Could Cap Gains

Despite the bullish momentum, Jeff Anderson, head of Asia at STS Digital, highlights a key obstacle: the hedging behavior of options market makers at $115,000 and above.

Market makers, tasked with providing liquidity and maintaining balanced exposure, often hedge their positions by selling BTC as prices rise. This dynamic creates a “gamma” effect that can dampen price advances.

Data from Deribit’s options market, tracked by Amberdata, shows significant positive gamma exposure for strike prices from $115K to $150K. Positive gamma means dealers’ delta increases as BTC prices rise, prompting them to sell more BTC and counteract upward moves.

“There’s a substantial buildup of call option overwriting in this range, which makes dealers cautious,” Anderson said. “If Bitcoin can push through the gamma barrier at $115K, the rally could accelerate significantly.”

---