Bitcoin Breaks $75,000 as Derivatives Unwind Fuels Sharp Rally
Traders closing bearish put options from February's sell-off are driving the surge, with the broader crypto market up 5%
Bitcoin surged past $75,000 on Tuesday, reaching a high of $75,800 and decisively breaking through a resistance zone that had repelled rallies three times since 2024. The move appears driven not by fresh bullish conviction but by the mechanics of the derivatives market — specifically, the unwinding of bearish bets placed during February's sharp sell-off.
According to Markus Thielen, founder of 10x Research, the rally was catalyzed by traders closing out put options at the $55,000 and $60,000 strike prices as those contracts approached expiration with little chance of finishing in the money. Put options function as insurance against price declines, and traders had aggressively purchased them in early February when bitcoin nearly touched $60,000 on some exchanges. With the market stabilizing and those hedges losing value, holders moved to sell or close the positions rather than let them expire worthless.
The unwinding has generated what Thielen described as second-order bullish effects. As traders sell puts, market makers — who take the other side of these trades — must buy bitcoin to rebalance their exposure, creating additional upward pressure on spot prices. CoinDesk had flagged this dynamic last week, warning that the rally could accelerate as prices approached $75,000 due to expected market-maker hedging flows. Notably, however, there has been little aggressive call-option buying to accompany the move, suggesting the breakout reflects hedge liquidation rather than a wave of new bullish positioning.
The broader cryptocurrency market rallied in sympathy. The CoinDesk 20 Index climbed 5% to 2,202 points over 24 hours. Ether rose nearly 8% to $2,360, buoyed by growing demand for bullish options bets, while XRP and Solana gained 8% and 4%, respectively. Tokens including ZEC, PEPE, DOT, and VIRTUAL also posted notable advances.
The rally's derivatives-driven nature raises questions about its durability. By later Tuesday, bitcoin had already retreated below $75,000, trading near $73,900 — a pattern consistent with short-squeeze rallies that lose momentum once the mechanical buying pressure subsides. Traders and analysts will be watching closely to see whether genuine spot demand emerges to sustain prices above the $73,750-to-$74,400 resistance corridor, or whether the move proves to be another false breakout at a level that has repeatedly stalled advances over the past two years.
Originally reported by CoinDesk.