November is now shaping up to be Bitcoin’s worst month since the collapse of Terra and FTX in 2022. | Photo credit: Dado Ruvic
The largest cryptocurrency fell as much as 7.6 percent to $80,553 on Friday, deepening a sell-off that has wiped nearly 25 percent of its value this month. November is now shaping up to be the worst month for Bitcoin since the collapse of Terra and FTX in 2022 – a period that has caused a cascade of corporate bankruptcies across the industry.
This latest slump has been driven mainly by spot selling – including redemptions from large exchange-traded funds, long-inactive portfolios losing their assets, and declining demand from momentum traders. But options positioning has contributed to the turbulence, exacerbating price swings as Bitcoin exceeds levels where dealers adjust their hedges to remain neutral – a process known as gamma exposure.
“Bitcoin remains vulnerable to continued technical pressure with the potential for gamma-driven acceleration through key levels of support,” said Chris Newhouse, research director at Ergonia, a firm specializing in decentralized finance.
One of those levels – $85,000 – was breached earlier Friday. That strike had attracted strong demand for put options, forcing market makers to hedge when hedging major risks. In this setup, dealers typically have a “short range,” meaning they sell more Bitcoin as it falls to stay balanced – a dynamic that can amplify downside moves. These companies, often large liquidity providers, strive to remain neutral by adjusting their exposure as prices change. But when Bitcoin breaks through heavily traded strikes, that hedging activity can act as a technical accelerator.
The next important level is $80,000, where options models show the dynamic hedging flips. Around $85,000, dealers were “short range,” meaning falling prices increased their risk, leaving more sales covered. But near $80,000 their positioning changes: they become ‘long gamma’, with further declines reducing their risk and requiring them to buy Bitcoin to stay balanced – a shift that could soften the blow of continued selling. Bitcoin was trading at around $85,130 at 5:18 PM in New York on Friday.
Traders have loaded put options at both strike levels, according to Deribit, increasing pressure on dealers who sold these contracts. The impact of dealer hedging is more of a technical accelerator than the main driver of the decline, but underlines how market depth has weakened in recent weeks. And that leaves fewer buying orders on the major exchanges to soften sharp declines. When trade thins out in this way, even simple selling can move prices further and faster than they would otherwise.
“Based on dealer inventory for BTC options on Deribit, also known as gamma exposure levels, dealers will accelerate a move lower until Bitcoin reaches $80,000,” said Greg Magadini, director of derivatives at Amberdata. “At $80,000, dealers are long range, once again forcing them to be BTC buyers at those prices.”
While the options market is contributing to the recent volatility, the bulk of crypto derivatives activity is in perpetual futures, and these exhibit similar problems. Open interest remains high, but many bullish traders are stuck in losing positions. As prices fall, forced liquidations begin to take hold, creating automatic sell orders that deepen the route even further.
Buy orders were close to previous highs around $98,000, in an attempt by bulls to grab a rebound. But now that Bitcoin has dropped through $85,000, these bids are not happening.
The downward pressure has been amplified by outflows from several large Bitcoin exchange-traded funds, which were a steady source of demand earlier this year. As these funds shrink, they remove a layer of buying interest that previously helped stabilize the market during sharp swings. That loss of steady inflows has also made the market more susceptible to routine selling, as there is less passive demand to compensate.
These overlapping dynamics – previous hedging flows, forced futures sales and a thinner market – are not unique to crypto. They can surface in any fast-moving market when selling is accompanied by low liquidity and large players are simultaneously trying to manage risks.
Similar patterns occur in stocks, bonds and commodities when rapid moves collide with risk management strategies used by market participants. Traders say attention is now focused on the $80,000 level. A clear break below could trigger stabilizing flows out of dealer hedging, but with momentum sellers still active, any rebound could be short-lived.
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Published on November 22, 2025
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