Bitcoin has broken above $75,000, with derivatives activity appearing to fuel the surge

A sharp move higher in Bitcoin—fueled largely by the unwinding of bearish derivatives positions—has lifted the broader crypto market, with the CoinDesk 20 Index rising around 5%.

Bitcoin surged past $75,000 early Tuesday, reaching a high near $75,800 and decisively breaking through a key resistance band between $73,750 and $74,400. That zone had capped price advances multiple times since 2024, making the latest breakout a notable shift in market structure.

The rally appears to have been driven primarily by traders closing out short positions established during the early February sell-off. According to Markus Thielen, the move has been closely tied to heavy put option selling around the $55,000 and $60,000 strike levels. With expiration approaching and prices well above those levels, traders increasingly viewed those contracts as unlikely to finish in the money, prompting a wave of position unwinds.

Put options—contracts that give traders the right to sell BTC at a predetermined price—are typically used as downside protection or bearish bets. During February’s decline, traders aggressively accumulated puts around $60,000 and lower as bitcoin briefly approached those levels on some exchanges. As sentiment improved, those positions became less relevant, leading to a reversal in positioning.

The closing of these bearish bets has had a reinforcing effect on prices. As Markus Thielen explained, unwinding downside hedges reduces selling pressure and forces market makers to buy bitcoin to rebalance their exposure, creating additional upward momentum.

Analysts had previously noted that a move toward $75,000 could trigger accelerated gains, partly due to these hedging dynamics. So far, however, there has been limited evidence of aggressive call option buying, suggesting the rally is being driven more by hedge unwinds than by fresh bullish positioning.

The strength in bitcoin has spilled over into the wider market. Ethereum has climbed nearly 8% to around $2,360, supported by growing demand for bullish options. XRP and Solana have also posted gains of roughly 8% and 4%, respectively.

Other tokens, including Zcash, Pepe, Polkadot and Virtuals Protocol, have emerged as notable outperformers in the latest market advance.