A powerful rally in Bitcoin—driven largely by the unwinding of bearish derivatives trades—has boosted the broader crypto market, with the CoinDesk 20 Index climbing about 5%.
Bitcoin broke above $75,000 early Tuesday, reaching a peak near $75,800 and cleanly surpassing a major resistance range between $73,750 and $74,400. That level had rejected price advances multiple times since 2024, making the breakout a significant technical development.
The move appears to have been fueled by traders closing out short positions put on during February’s sharp sell-off. Markus Thielen noted that heavy put selling around the $55,000 and $60,000 strike levels played a key role. With expiration nearing and bitcoin trading well above those levels, many of these contracts were unlikely to finish in the money, prompting traders to unwind their bearish hedges.
Put options—derivatives that allow traders to sell an asset at a fixed price—are typically used to hedge against downside risk. During the February drop, traders aggressively bought puts near $60,000 and below as bitcoin briefly approached those levels. As market conditions improved, those positions lost relevance, leading to a shift in positioning.
The unwinding process has also created additional upward pressure. As Markus Thielen explained, closing bearish hedges reduces downside protection and forces market makers to buy BTC to rebalance their books, creating supportive flows that can push prices higher.
Market watchers had previously suggested that a move toward $75,000 could accelerate gains due to these hedging dynamics. However, there has been little sign so far of aggressive call option buying, indicating the rally is being driven more by hedge unwinds than by fresh bullish bets.
Bitcoin’s strength has lifted the broader market. Ethereum has risen nearly 8% to around $2,360, supported by increased demand for bullish options positioning. XRP and Solana have gained roughly 8% and 4%, respectively.
Other tokens such as Zcash, Pepe, Polkadot and Virtuals Protocol have also stood out as top performers in the latest upswing.
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