Bitcoin options market makers are shorting Gamma, leading to short-term upward pressure and making it difficult for prices to significantly decline.

BlockBeats reported on October 23rd that Alex Thorn, the director of Galaxy Research, stated on social media that as the spot price of BTC has been rising in recent days, more and more options market makers are choosing to short Gamma. However, when shorting Gamma and the spot price rises, market makers need to buy back the spot to maintain Delta neutrality, which should amplify any short-term upward momentum. According to analysis by Amberdata, the starting price for market makers to short Gamma is about $28,500, and if the price of Bitcoin rises to $32,500, market makers need to buy $20 million of Delta for every 1% increase. This means that as the spot price rises, market makers need to buy more and more Bitcoin, and any short-term uptick should increase in magnitude. In addition, because traders are long Gamma in the range of $26,750-$28,250, when they are long Gamma but the spot price falls, they must buy back the spot to maintain Delta neutrality. Therefore, as options traders buy back Delta, any short-term price declines will face resistance. This is good news for the bulls, as if the spot price rises moderately, short Gamma covering may quickly lead to a significant price increase, but if the price falls, long Gamma covering may provide some support to limit short-term declines. In simple terms, Gamma is a second-order option risk derivative used to observe the relationship between the price changes of the underlying product and the change in the option position Delta value. Buying options (long) whether it is buying call options or put options, the Gamma value is positive. Selling option positions, whether it is selling call options or put options, the Gamma value is negative. Gamma squeeze occurs in the options market when market makers sell deep out-of-the-money options. When the Gamma of the option rises, they need to constantly buy more stocks to hedge their position as the stock price rises, hence this is called "Gamma squeeze".