President Donald Trump’s renewed aggressive stance toward Iran has pushed bitcoin down about 2% over the past 24 hours to $67,000. While this price action is consistent with routine volatility, the market structure beneath the surface looks fragile.
This is mainly due to flows in the Deribit listed options market, specifically a build-up of defensive positioning just below current prices that could result in a drop all the way down to $50,000.
A fragile setup under $68,000
In recent weeks, traders have loaded up on put options that offer downside protection. These defensive flows have been concentrated in put options at strike levels of $68,000 and below, all the way down to the mid-$55,000s. This is understandable given the macroeconomic risks from the Iran war, quantum threats and the brutal bear market that began late last year.
But when this kind of positioning builds up, it creates what savvy traders call a “negative gamma” zone—a setup where market makers, or traders who add liquidity to an exchange’s order book, are forced to react to price movements in ways that end up accelerating the prevailing trend, which in this case is bearish.
These kinds of dynamics have reinforced both bullish and bearish trends in the past.
The Glassnode chart shows that the trader’s gamma exposure is mostly negative from $68,000 to $50,000. This is the result of being on the opposite end of traders’ long put positions.
In other words, traders have short put positions. So when the market falls below $68,000, they face losses and will likely short BTC to hedge their exposure.
This hedging can push prices even lower and create a feedback loop that can accelerate quickly.
This is why the recent decline below the $68,000 level becomes critical. The break below this threshold not only signals technical weakness – it opens the door to a zone where forced selling can intensify.
“Negative gamma is now building just below the current price level, from $68K all the way down to the high 50s,” Glassnode said in its weekly report.
“A move into this zone could trigger an accelerated sell-off as hedging flows reinforce downward momentum, turning what would otherwise be a gradual move into sharper pricing, with a potential revisit to the $60,000 level, the bottom of the February 5 sell-off,” the firm added.
With liquidity still relatively thin after options expiration on March 27 and likely to remain thin over the Easter break, there may not be enough buyers to absorb that pressure.
So if the feedback loop kicks in fully, the drop could extend well below $60,000.
This setup shows that while bitcoin is currently reacting to war headlines, the inner workings of the market can also shape its trajectory.
If prices hold above $68,000, the current setup can relax without much damage. But a sustained break below that level could turn the market into a regime of selling feeds on itself, turning a routine dip into a much deeper move.
