Glassnode co-founder: Bitcoin’s “risk-off selling” pressure is lifted, and the market will return to the supply and demand price discovery mechanism
Negentropic, co-founder of Glassnode, an on-chain data analysis institution, published an article on the X platform yesterday (26th), pointing out that the recent price behavior of Bitcoin (BTC) has shown obvious structural improvements: the market is breaking away from the previous compression state dominated by derivatives hedging exchanges, and the direction of future price development has gradually shifted to a favorable direction.
(Preliminary summary: Kill! Bitcoin fell below 87,000 US dollars, Ethereum lost $2900, Magee's bullish orders suffered another setback, and the Bitcoin OG giant whale lost 56 million mg)
(Background supplement: Why did Bitcoin fail to rebound? Bloomberg: The currency price retraced 30%, creating a rare "tax loss harvesting" opportunity at the end of the year)
On-chain data analysis agency Glassnode Co-founder Negentropic posted an article on the X platform yesterday (26th), pointing out that the recent price behavior of Bitcoin (BTC) has shown obvious structural improvements: the market is breaking away from the previous compression state dominated by derivatives hedging exchanges, and the direction of future price development has gradually shifted to favor the bullish side.
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
The retracement has been taken over, and the price structure remains intact
Negentropic said that from the overall trend, Bitcoin's retracement has not seen panic selling, but has been repeatedly taken over by buyers. The recent low has not been broken to this day, showing that the market has a certain consensus on the current price range and the price structure is still healthy.
At the same time, he specifically pointed out that the core of the change in market structure lies in the "relief of the pressure on derivatives." Recently, Bitcoin has experienced the largest option expiration date in history, with a nominal value of approximately $23.6 billion. Negentropic pointed out that in the past few weeks, huge hedging demand has kept prices passively controlled, and upward attempts were mostly due to the hedging mechanism being quickly digested, rather than the natural selling pressure of the market.
Currently, as this batch of options expires, related hedging funds will gradually withdraw from the market, the price of Bitcoin is no longer "pegged" by the derivatives structure, and the market is entering a new price discovery stage.
Extended reading: Volatility warning" The largest $27 billion option delivery in history detonated today, and Bitcoin briefly fell below 87,000
Price discovery returns, and the probability of upward continuation increases
Negentropic believes that when prices are no longer dominated by hedging transactions, the market will often return to the price discovery mechanism determined by supply and demand. At present, from a structural perspective, the market tends to continue its upward trend rather than entering a trend reversal.
At the macro level, Negentropic further pointed out that the U.S. M2 money supply continues to expand. The latest data shows that M2's annual growth rate reached 4.3% in November, with its total size rising to US$22.3 trillion, a record high. It has grown for 21 consecutive months, and the water level is significantly higher than the 2022 high.
Even after adjusting for inflation, real M2 still showed an annual increase of 1.5% and has risen for 15 consecutive months. He bluntly said that from a long-term perspective, the trend of continued dilution of the purchasing power of legal currency has not changed, which is also an important background to support the narrative of scarce assets.
Negentropic finally concluded that as the structural pressure on derivatives is lifted and the liquidity environment remains loose, the market’s tailwind factors are gradually stacking up. He also reminded investors that during the holidays, they may wish to extend the time horizon and re-examine the market's position and long-term trends.
