Bitcoin’s recent price stagnation around the $90,000 mark has sparked discussions among market analysts, particularly regarding the strategies employed by long-term holders, commonly referred to as “whales.” According to market analyst Jeff Park, this muted price action does not stem from a lack of demand but is primarily influenced by the activities of large investors engaging in covered call selling.
Covered call selling involves selling call options on Bitcoin that is already owned, allowing sellers to pocket premiums while offering buyers the chance to purchase Bitcoin at a set price. Park emphasizes that this tactic has gained traction among long-term holders who accumulated Bitcoin years ago. By using the options market, they can generate additional income from their holdings. However, this activity inadvertently contributes to downward price pressure.
Market makers, tasked with hedging the options sold, often do so by selling Bitcoin in the spot market. This creates a consistent sell-side pressure that can inhibit price appreciation. Park noted, “When you sell calls against Bitcoin you’ve held for more than a decade, the only fresh market exposure comes from the call selling itself. That exposure is negative, making the seller a net source of downward pressure.”
Furthermore, even amidst continuous interest in Bitcoin from institutional investors through exchange-traded funds (ETFs), the influx has not translated to increased market liquidity. Instead, this dynamic has shifted price influence to derivatives trading, where options flows are starting to dictate short-term price movements.
This trend has emerged alongside Bitcoin’s relatively distinct behavior compared to US equity markets in late 2025. While major stock indices have reached record highs, Bitcoin’s performance has dwindled from earlier peaks, creating a divergence that analysts are keenly observing. The correlation that once existed between Bitcoin and tech stocks appears to be diminishing, with different market forces now influencing Bitcoin’s trajectory.
Looking ahead, opinions about Bitcoin’s next move remain sharply divided. Some analysts anticipate that as the US Federal Reserve embarks on a rate-cutting cycle, Bitcoin could experience renewed momentum, benefiting from an influx of liquidity into financial markets. Currently, CME Group’s FedWatch tool indicates that a notable percentage of traders are factoring in a potential rate cut during the upcoming January FOMC meeting.
Conversely, caution persists among others who warn that sustained covered call selling, coupled with unfavorable macroeconomic conditions, could lead Bitcoin back to lower price levels, with some projections suggesting a drop toward $76,000. Recently, Bitfinex noted signs of “seller exhaustion” following a turbulent period marked by heavy deleveraging and hasty exits from the market made by short-term holders, further emphasizing the complex interplay of emotions and strategies that currently define the cryptocurrency landscape.
