Matrixport Research: $25 Billion Gamma Unwinding Imminent, Liquidity Yet to Return Behind the Rebound

Short Gamma Amplifies Volatility: $63,000 and $69,000–$70,000 Become Key Ranges

This round of decline and rebound largely stemmed from the short gamma structure. Previously, market makers maintained short gamma positions and were forced to sell futures to hedge their exposure during the price decline, thereby amplifying the downtrend and accelerating the move towards $63,000. As risk appetite improved and tech stocks strengthened, boosting sentiment, the 加密貨幣 market saw a correlated rebound. 市場 makers in a short gamma state were forced to buy Bitcoin for hedging during the price recovery, further amplifying the technical rebound. However, the market fundamentals did not undergo substantial changes this week; price fluctuations were still primarily driven by positioning structure and gamma factors.

Structurally, the $69,000–$70,000 range concentrates the largest negative gamma exposure, becoming a short-term “bottleneck.” Once broken below, the downside convexity will be further amplified; when prices rebound to this range, they are likely to encounter resistance from hedging flows. Until the related short gamma exposure completes its expiration and unwinding, price action may continue to fluctuate around this area.

As approximately $2.5 billion in short gamma exposure is gradually cleared by February 27th, technical disturbances are expected to weaken. Subsequently, the market will gradually transition from positioning-driven logic to a trend dominated by fundamentals and liquidity. However, the current weak trading volume and limited capital inflows indicate that structural pressure has not yet been alleviated.

Capital Outflows and Liquidity Constraints: The Rebound Resembles a “False Recovery”

Although short-term technical indicators have shown positive divergence relative to price, our baseline judgment remains: Bitcoin is still in a larger-scale correction phase. The recent rebound is more likely part of a consolidation rather than the start of a new sustained uptrend. The core issue remains unchanged: persistent capital outflows continue to weigh on the market. According to the 30-day realized flow indicator, approximately $26.7 billion has flowed out of the market since the retreat from the $89,000 high. This scale has already surpassed the level seen during the industry-wide contagion risk event in July 2022.

Historical experience shows that the later stages of a bear market are often accompanied by sharp counter-trend rallies, followed by renewed weakness. Before a truly sustainable bottom is formed, the market typically experiences multiple “false recoveries.” Although models indicate we are closer to a structural bottom, the persistent capital outflows suggest the absolute low point has likely not yet been confirmed.

More critically, liquidity conditions matter. In this cycle, each relatively clear rebound has almost been accompanied by a significant increase in trading activity, with 24-hour trading volume reaching at least $260 billion. The recent rebound’s daily trading volume was only about $118 billion, more indicative of a temporary market stabilization than a clear improvement in sentiment. Without substantial liquidity expansion, rebounds often struggle to sustain.

Overall, this week’s volatility stemmed more from the amplification effect of the short gamma mechanism rather than an improvement in fundamentals. As the $2.5 billion in short gamma exposure gradually unwinds, the market will see reduced short-term technical disturbances. However, the real key lies in whether capital inflows and liquidity repair can occur simultaneously. Until the cumulative $26.7 billion outflow since the high is reversed, any rebound should be viewed more as a tactical trading opportunity rather than a structural trend reversal.

Some of the above views are from Matrix on Target. 聯絡我們 to get the full Matrix on Target report.

Disclaimer: The market carries risks, and investment requires caution. This article does not constitute investment advice. Digital asset trading can involve significant risk and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.

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