If the BTC price drops to $29,375, the trader's uPnL will be: $500 for the BTC position; -500$ for options (in this example, we do not take into account the change in gamma, vega, theta, etc.). At this point, the options delta has changed by -0.53 and -0.32, the total position delta: 0.53 + 0.32 - 0.8 = 0.05.
The Delta Hedger is tuned to keep the delta in the range of -0.05 – 0.05. Once the position delta becomes 0.05, the delta hedger sells another 0.05 BTC, thus the position delta becomes 0 again. The user can select the delta range. The wider it is, the less often futures are bought/sold, and the less commission costs and gas fees become.