Analyst: Sideways Market Driven by Bitcoin Veterans Selling Covered Calls

According to market analyst Jeff Park, long-term Bitcoin (BTC) whales are selling covered calls—a strategy where call options are sold, granting the buyer the right (but not the obligation) to buy an asset at a predetermined price, allowing the seller to collect a premium—thus suppressing spot BTC prices.

Large, long-term BTC holders, often referred to as “whales” or “OGs,” exert significant sell-side pressure through this covered call approach. This is partly due to market makers being on the opposite side, purchasing the covered calls, Park noted.

This dynamic means that market makers need to hedge their exposure from the call purchases by selling spot BTC, which drives market prices down, even amid strong demand from traditional exchange-traded fund (ETF) investors.

Since the BTC used to back the options has been held for a long time and does not indicate new demand or fresh liquidity, the call selling serves as a downward pressure on prices. 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.”

The analysis found that Bitcoin’s price is being influenced by the options market, and price fluctuations will persist as long as whales continue to capitalize on short-term profits from their Bitcoin holdings by selling covered calls.