BTC and ETH Enter Deep Negative Gamma Zone, Market Makers' Hedging Intensifies Volatility

Bitcoin and Ethereum are currently in a negative gamma zone, and market makers' hedging operations may amplify price volatility. Market makers typically hedge risks by buying and selling tokens or futures, but in a negative gamma state, they must sell when prices drop and buy when prices rise, thereby exacerbating market trends. Adam, a macro researcher at Greeks.Live, stated that Bitcoin is in a negative gamma between approximately $58,000 and $72,000, with a lack of positive gamma buffer below the current price. This hedging behavior could trigger a chain reaction, turning small declines into large-scale liquidations of perpetual contracts. Adam pointed out that the market may face a fragile order book and momentum-driven price movements before BTC and ETH return to the gamma flip level of around $73,000.

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