Coinbase Warns of Potential Bitcoin Price Cascade

Coinbase Institutional has outlined critical price thresholds for Bitcoin, indicating that the primary support level is around $60,000, while the first significant resistance is at $82,000.

The firm analyzed gamma exposure (GEX), which gauges how market makers react to price changes in the options market. Depending on the market conditions, these players might either mitigate volatility or exacerbate trends.

Two potential market scenarios were identified:

• Growth Slowdown: In the $85,000 to $90,000 range, positive gamma is expected to prevail, causing market makers to sell on price increases and buy on dips. If Bitcoin remains above $82,000, its ascent to $90,000 may be slow and unstable due to selling resistance.
• Accelerated Decline: With negative gamma concentrated in the $60,000 to $70,000 range, any price drop could compel hedgers to increase sales, leading to a rapid decline toward the $60,000 support level.

Coinbase has proposed four possible scenarios for Bitcoin's price movement:

• Rebound from Resistance: If Bitcoin fails to break above $82,000, a price pullback is anticipated.
• Breakthrough of $82,000: If this level holds, it may become a support point, although further gains toward $90,000 will likely be marked by frequent pullbacks.
• Drop to $60,000: Analysts caution against attempting to capitalize on falling prices, advising that long positions should only be taken after a confirmed rebound from $60,000.
• Breakdown below $60,000: A drop below this level could spark a cascade of sell-offs, resulting in a more rapid decline than traders might expect, necessitating risk hedging.

Market Dynamics

According to analyst Gaah from CryptoQuant, the dominance of sellers in the derivatives market, along with reduced leverage, is beneficial for Bitcoin's long-term health. He noted that funding rates have become negative, and Bitcoin appears to be forming a bottom in the $62,000 to $68,000 range.

Since July 2025, selling pressure has been prevalent in the market, with buy limit orders simply absorbing supply, while current selling pressure is at a three-month high. Gaah asserts that the forced capitulation of traders due to price declines is a positive sign, as it reduces excess debt, which is vital for sustainable market growth.

Upcoming Options Expiry

On February 27, a significant expiration of Bitcoin options will occur on the Deribit exchange, with a total notional value of $7.49 billion tied to 115,000 contracts. The 'max pain' point is identified at $75,000, with a put/call ratio of 0.76.

Analysts from Glassnode have observed a shift in positioning within the derivatives market, noting increased negative gamma at current price levels and reduced positive gamma barriers above. They warn that as long as Bitcoin stays in the negative gamma zone, market makers' hedging activities could heighten price volatility.

Furthermore, analysts at Santiment reported on February 24 that Bitcoin's correlation with stocks has reached its lowest level since 2022.