Amid market volatility and declining revenue, Bitcoin miners are turning to derivatives as a strategic risk management measure to protect profits against growing challenges.

Bitcoin Market Faces Massive Volatility
Bitcoin is currently struggling to break the $85,000 resistance level, down 30% from its all-time high of $109,287 set in January 2025. This correction trend increases market volatility and makes investors concerned about the next phase of the price cycle.

According to Anthony Power of Compass Mining, historical data from previous Bitcoin halving cycles suggests that Bitcoin could see a strong recovery in late 2025 or early 2026. This is consistent with past patterns, where Bitcoin typically experiences a major correction before resuming its rally.

However, technical signs are currently giving mixed signals. The MVRV Z-Score, which compares Bitcoin’s market value to its intrinsic value, suggests that the coin may be in a fair value or accumulation zone. Meanwhile, the percentage of Bitcoin that has not changed in over a year remains at 63%, reflecting investor caution.

In addition, the Fear and Greed Index also shows market volatility. After reaching an “Extreme Greed” level of 90 in December 2024, the index has plunged to 15 points, falling into the “Extreme Fear” zone.

Macro Factors Affecting Bitcoin Price
Institutional investment and US policies are having a significant impact on the market. The approval of a Bitcoin ETF in January 2024 sparked a 126% rally, but by early 2025, the market saw record outflows from ETFs, indicating a weakening of institutional investor confidence.

On the other hand, President Trump’s recent executive order establishing the US Strategic Bitcoin Reserve shows growing support for cryptocurrencies from the federal government.

Despite short-term volatility, long-term forecasts for Bitcoin remain bullish. Standard Chartered and Bitwise predict that Bitcoin could hit $200,000 by the end of 2025, driven by new institutional capital and regulatory clarity.

Bitcoin Miners Face Growing Pressure
While Bitcoin’s long-term outlook remains positive, miners are under pressure due to a combination of falling prices, increased mining difficulty, and reduced block rewards. These factors have significantly reduced the profitability of Bitcoin mining, forcing miners to look for risk management tools.

One solution chosen is Luxor’s Hashprice contract, a derivative that allows miners to hedge their revenue against Bitcoin price fluctuations. These tools help miners maintain financial stability, especially during volatile market periods.

Conclusion
The recent Bitcoin price correction is putting a lot of pressure on miners, but the long-term outlook remains positive with expectations of a strong price increase by the end of 2025. Going forward, risk management strategies through derivatives can play an important role in helping miners overcome difficult times and optimize profits in a volatile market.