According to ChainCatcher, market analyst Jeff Park says that long-term Bitcoin holders, often called “whales” or “OGs,” are playing a key role in putting downward pressure on Bitcoin’s spot price. These large investors are using a strategy known as selling covered call options, which is adding extra selling pressure to the market.
In simple terms, a covered call means that an investor who already owns Bitcoin sells call options on that Bitcoin. By doing this, the seller earns an option premium, which provides steady income even if Bitcoin’s price does not rise much. However, this strategy also limits the upside if prices go higher.
When whales sell a large number of call options, market makers the firms that buy these options need to protect themselves from risk. To hedge their exposure, market makers often sell Bitcoin in the spot market. This hedging activity increases the amount of Bitcoin being sold, which can push prices lower.
This process creates a situation where Bitcoin’s price faces pressure even when there is strong demand from traditional investors, such as those buying Bitcoin ETFs. While ETF inflows normally support prices, the hedging-related selling from market makers can offset that demand.
To understand this better, a call option gives the buyer the right but not the obligation to buy Bitcoin at a fixed price on a future date. The seller of the option collects a premium upfront. If the price stays below the strike price, the seller keeps the premium and the Bitcoin. Because many whales expect prices to remain range-bound in the short term, selling calls becomes an attractive strategy.
However, when done at scale, this strategy can weigh on the market. The combined effect of whales selling call options and market makers selling spot Bitcoin to hedge results in persistent downward pressure on prices, even without panic selling.
Jeff Park’s analysis suggests that Bitcoin’s current price weakness is not due to falling interest or lack of demand, but rather advanced trading strategies used by large, experienced holders. Until this options-related pressure eases, Bitcoin’s spot price may continue to struggle despite positive long-term fundamentals.
