As reported by Deribit, the $60,000 mark is a crucial level to monitor in the near future.
By Omkar Godbole|Edited by Sheldon Reback Jun 5, 2026, 7:52 a.m. 2 min readMake preferred on Derivative markets might intensify bitcoin's downturn. (TabTrader.com/Unsplash)Key Points:
- Bitcoin's decline towards $60,000 has placed the market at a pivotal structural point.
- This price serves as a fundamental cost basis for institutions and a significant strike for hedging in derivatives.
- A substantial drop below this level could lead to mechanical sell-offs, potentially worsening the market decline.
Currently, Bitcoin BTC$61,875.23 is trending downwards, approaching the $60,000 threshold amidst unprecedented ETF outflows.
Analysts have identified the $60,000 mark as a significant support level, below which the market could face even steeper losses.
Jean-David Péquignot, the chief commercial officer of Deribit, emphasized that this price point is critical not only for its psychological significance but also as a structural benchmark with tangible implications for institutional players and those in the derivatives market.
The Cost Basis Challenge
Péquignot noted that a considerable portion of institutional funds, which includes ETF investors, large holders, and short-term traders, acquired Bitcoin at prices ranging from $60,000 to $67,000 in the past year.
With Bitcoin now trading in that price range, these investors find themselves at their cost basis, essentially breaking even. Should the price decline further, they will face unrealized losses, making the holding costly, particularly as AI stocks and other traditional markets thrive.
"As the price dips below their cost basis, the resulting unrealized losses may prompt hurried selling, especially as the opportunity cost of holding BTC increases against a booming AI equity sector," he stated.
Michael Saylor, the executive chairman of Strategy (MSTR), the largest publicly traded holder of Bitcoin, has also pointed to capital rotation as a factor contributing to recent BTC downturns.
The Derivatives Issue
The situation can quickly become mechanical at this point.
Deribit has over $1.2 billion in notional open interest at the $60,000 strike put options, which provide payouts if prices fall below that threshold. Investors have used these as a hedge against a prolonged sell-off.
However, market makers, who are positioned opposite the investors, are now short on these puts, or "short gamma."
As Bitcoin approaches the $60,000 mark, these market makers will need to sell spot BTC or futures to maintain their positions. This hedging activity can exacerbate the sell-off, potentially transforming a gradual decline into a more chaotic one, according to Péquignot.
He also highlighted that there are excessive leveraged longs in the market, and a breach of the $60,000 level could lead to further liquidations, adding to the downward pressure.
"With leverage not fully cleared from the market, a drop below $60K could quickly deteriorate collateral metrics, triggering a cascade of automated long liquidations," he explained.
It is worth noting that billions in leveraged longs tied to Bitcoin and other cryptocurrencies have already been liquidated this week.
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