Analysis: The suppression of Bitcoin derivatives has been lifted, and the price discovery mechanism has returned

Glassnode co-founder Negentropic published an article stating that the current price structure of Bitcoin is showing positive changes. Recent pullbacks continue to receive buying support, and previous lows remain intact, indicating that the market is overall exhibiting a constructive trend. A key structural change is that the "short squeeze" effect in derivatives has essentially been cleared. With the largest Bitcoin options expiration event in history taking place, with a nominal size of approximately $23.6 billion, the price suppression state dominated by hedging behavior in the previous weeks is coming to an end.

Negentropic noted that before the options expiration, market rallies are often suppressed by mechanical hedging rather than real supply and demand. As related funds exit the market, BTC is no longer "pinned down," and the price structure is expected to be re-led by the market itself, with the price discovery mechanism returning and upward bias gradually strengthening. From a macro perspective, he emphasized that the liquidity environment is still improving. The U.S. M2 money supply has increased by 4.3% year-on-year, rising to a historical high of $22.3 trillion in November, expanding for 21 consecutive months, and is about $400 billion higher than the peak in 2022. Even after adjusting for inflation, the real M2 still shows a year-on-year increase of 1.5%, rising for 15 consecutive months. The long-term trend remains clear—fiat currency dilution has not stopped, and macro and structural factors are building a new tailwind environment for Bitcoin.