Analysis: Bitcoin derivatives suppression lifted, price discovery mechanism resumes

On December 26, Glassnode co-founder Negentropic posted that the current Bitcoin price structure is showing positive changes. Recent pullbacks have continued to be supported by buying interest, and previous lows remain intact, indicating that the overall market is exhibiting a constructive trend. A key structural change is that the “liquidation effect” of derivatives has essentially cleared. With the largest Bitcoin options expiration event in history, totaling approximately $23.6 billion in notional value, the previous period of price suppression dominated by hedging behavior over several weeks is coming to an end. Negentropic states that before options expiration, market rallies are often mechanically suppressed by hedging rather than genuine supply and demand. As related funds exit the market, BTC is no longer “pinned,” and the price structure is expected to be re-dominated by the market itself. Price discovery mechanisms are returning, and upward momentum is gradually strengthening. From a macro perspective, he emphasizes that liquidity conditions are still improving. The US M2 money supply increased by 4.3% year-over-year, reaching a record high of $22.3 trillion in November, continuing 21 months of expansion, about $400 billion higher than the 2022 peak. Even after inflation adjustment, real M2 still grew by 1.5% YoY and has been rising for 15 consecutive months. The long-term trend remains clear—fiat currency dilution has not stopped, and macroeconomic and structural factors are creating a new tailwind environment for Bitcoin.