Bitcoin (BTC) and the broader crypto market are witnessing strong demand for bullish leveraged plays, a sign the market is overheated. While market makers’ hedging is likely to keep BTC supported at around $100,000, the heightened activity raises the risk of pullbacks for other cryptocurrencies.

Bitcoin, the leading cryptocurrency by market value, tapped a record high above $103,000 early Thursday, following President-elect Donald Trump’s decision to appoint pro-crypto Paul Atkins as chairman for the Securities and Exchange Commission (SEC).

The breakout sent traders chasing the price rally, pushing funding rates for perpetual futures skywards, a sign of growing demand for and overcrowding in long positions. In this scenario, a slight pullback can result in large liquidations (forced selling by exchanges due to margin shortages) and increased downside volatility.

Support may come from the options market, according to Griffin Ardern, head of options trading and research at crypto financial platform BloFin. When options prices rise faster than that of the underlying asset — that is, when the so-called gamma imbalance is positive — market makers tend to sell their holdings to keep their net exposure neutral. They buy when it’s negative, acting as a contrarian force and limiting price swings.

“BTC can be stable at around $100,000 in the short-term, helped by the hedging activity of market makers,” Ardern told CoinDesk. “This support from the options market may offset the impact of deleveraging to a certain extent.”

The annualized funding rate for bitcoin surged to nearly 100%, surpassing rates for purely speculative tokens like DOGE, data from VeloData show. Other coins, such as XRP, CRO and XMR, also boast funding rates in excess of 100%.

“That EOD [volume weighted average price] suggests Saylor blew another few billion, and the [BTC] funding rates make me think this final move was purely lever-driven,” said Felix Hartmann, founder and managing partner of Hartmann Capital, referring to Michael Saylor, executive chairman of MicroStrategy, the largest publicly traded holder of bitcoin. “Wouldn’t be shocked at a good old 20-30% bull market correction here. 80s are fair game.”

Hartmann stressed the need for additional demand over and above MSTR’s purchases to keep the bull run going, a view echoed by several observers on social media. They suggested that either the market continues to rally, justifying the costs associated with holding bullish bets, or turns lower in a sharp correction.

Even with market makers’ activity, bitcoin price volatility could return toward the end of the year.

“The positive gamma at $105,000 in options expiring on Dec. 27 could bring sufficient gravity, but after the expiry, it will disappear, boosting price uncertainty,” Ardern told CoinDesk.

Options are derivative contracts, offering the purchaser the right but not the obligation to buy or sell the underlying asset at a preset price at a later date. A call or a bullish bet gives the right to buy, while a put confers the right to sell.