- Long-term Bitcoin holders sell covered call options, creating downward pressure on Bitcoin spot prices.
- Market makers buy these call options and hedge by selling spot Bitcoin, contributing to price declines.
- Bitcoin’s price is influenced by the options market dynamics rather than new token demand.
- Bitcoin has decoupled from stock market trends, trading near $90,000 despite stocks reaching new highs.
- Some analysts anticipate a price rally with potential Federal Reserve rate cuts, while others expect a drop to $76,000.
Long-term Bitcoin (BTC) holders, often referred to as whales or OGs, are suppressing Bitcoin spot prices by selling covered calls. This options strategy allows buyers the right, but not the obligation, to purchase Bitcoin at a future predetermined price, while sellers collect premiums. Market analyst Jeff Park explained that these large holders introduce substantial sell-side pressure through covered call selling, partly because market makers buy these options.
Market makers hedge their risk by selling spot Bitcoin, which puts additional downward pressure on prices. This activity occurs despite strong demand from traditional exchange-traded fund (ETF) investors. The Bitcoin used to back these options has typically been held for over a decade, meaning it does not represent fresh liquidity or new demand. Park stated, “When you already have the Bitcoin inventory that you’ve had for 10-plus years that you sell calls against it, it is only the call selling that is adding fresh delta to the market — and that direction is negative — you are a net seller of delta when you sell calls.” This dynamic causes Bitcoin’s price movement to be primarily governed by the options market.
In 2025, Bitcoin decoupled from its previously observed correlation with tech stocks. While stock markets hit new highs, Bitcoin declined to around $90,000. Several analysts project that Bitcoin’s price may rally once the United States Federal Reserve resumes its rate-cutting cycle, which typically increases liquidity for risk assets. According to the CME Group’s FedWatch data, 24.4% of traders expect an interest rate cut at the Federal Open Market Committee meeting in January.
However, other experts suggest Bitcoin’s bull run may have ended, forecasting a possible drop to $76,000.
For more details, see the analysis by Jeff Park here.
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