Glassnode Co-founder: Bitcoin "hedging sell-off" pressure eases, market will return to supply and demand price discovery mechanism

On-Chain Data Analysis Firm Glassnode Co-Founder Negentropic posted on X platform yesterday (26th) stating that Bitcoin (BTC)'s recent price behavior has already shown clear structural improvement: the market is moving away from the previously derivative-driven hedge trading compression state, and the future price development trend has gradually shifted to favor the bulls.
(Background: Wow! Bitcoin drops below $87,000, Ethereum loses $2900, buddy longs face setbacks again, Bitcoin OG whale unrealized loss of $56 million)
(Additional context: Why is Bitcoin unable to rebound? Bloomberg: Price retraced 30%, creating a rare “tax loss harvesting” opportunity at year-end)

Negentropic, co-founder of on-chain data analysis firm Glassnode, posted on X yesterday (26th) stating that Bitcoin (BTC)'s recent price behavior has already shown clear structural improvement: the market is moving away from the previously derivative-driven hedge trading compression state, and the future price development trend has gradually shifted to favor the bulls.

Seeing constructive price behavior across the board. Pullbacks are being met with bids, and the recent lows are still intact.

One important shift under the surface: the derivatives overhang has finally cleared.

The largest $btc options expiry ever just passed with roughly…

— 𝗡𝗲𝗴𝗲𝗻𝘁𝗿𝗼𝗽𝗶𝗰 (@Negentropic_) December 26, 2025

Support is present at pullbacks, maintaining the price structure

Negentropic stated that, from the overall trend perspective, Bitcoin’s pullbacks have not triggered panic selling; instead, they have repeatedly been absorbed by buying interest. The recent lows remain unbroken, indicating that the market has a certain consensus on the current price range, and the price structure remains healthy.

He also pointed out that the core of the market structure shift lies in the “relief of derivative pressure.” Recently, Bitcoin experienced the largest options expiry in history, with a nominal value of about $23.6 billion. Negentropic explained that over the past few weeks, massive hedging demand has kept prices passively controlled; upward attempts are mostly quickly absorbed due to hedging mechanisms rather than natural market selling pressure.

Now that this batch of options has expired, related hedging funds will gradually exit, and Bitcoin’s price will no longer be “pinned” by derivative structures. The market is entering a new price discovery phase.

Read more: Volatility Alert » The largest $27 billion options expiry in history triggers today, Bitcoin briefly dips below 87,000

Price discovery resumes, upward continuation probability increases

Negentropic believes that when prices are no longer dominated by hedge trading, the market tends to revert to a price discovery mechanism driven by supply and demand. Currently, from a structural perspective, the market favors an ongoing upward trend rather than a trend reversal.

On a macro level, Negentropic further pointed out that the US M2 money supply continues to expand. The latest data shows that in November, M2’s annual growth rate reached 4.3%, with the total amount rising to $22.3 trillion, hitting a new all-time high, and has grown for 21 consecutive months, well above the 2022 high.

Even after inflation adjustment, real M2 still shows a 1.5% annual increase and has risen for 15 consecutive months. He bluntly stated that from a long-term perspective, the trend of fiat currency purchasing power continued to be diluted, which is an important background for supporting the narrative of scarce assets.

Negentropic concluded that as derivative structure pressure eases and liquidity remains relatively loose, favorable market factors are gradually stacking up. He also reminded investors to consider extending their time horizon during holiday periods to reassess the market position and long-term trend.