Bitcoin’s Price Decline: Long-Term Holders’ Covered Call Strategy Creates Market Pressure
Whales and OGs Contribute to Bitcoin’s Downward Trend Through Options Trading
In the complex world of cryptocurrency trading, a significant factor behind Bitcoin’s recent price declines has emerged from an unexpected source: the very investors who have supported the digital asset since its early days. According to Jeff Park, Chief Investment Officer at ProCap BTC and a respected voice in cryptocurrency market analysis, long-term Bitcoin holders—commonly known as “whales” or “OGs”—are increasingly employing a covered call strategy that may be contributing to downward price pressure in the cryptocurrency market.
These veteran investors, many of whom have held Bitcoin for a decade or more, are generating supplementary income by selling call options against their substantial cryptocurrency holdings. This strategy, while profitable for the individual investors, creates a ripple effect throughout the market that Park believes is driving Bitcoin’s price lower despite growing institutional interest through traditional ETFs. The practice involves selling options that give buyers the right—though not the obligation—to purchase Bitcoin at a predetermined price in the future. While the seller collects a premium regardless of whether the option is exercised, the collective impact of these transactions appears to be introducing negative pressure on Bitcoin’s spot price.
“When you already own Bitcoin that you’ve had for over 10 years and start selling calls against it, only the act of selling calls adds new delta to the market—and that delta is negative—so you end up being a net seller of delta when you sell calls,” Park explained in his market analysis. This technical observation highlights how activities in the derivatives market can substantially influence cryptocurrency prices beyond the more visible spot trading activity. The mechanism becomes particularly significant when considering the role of market makers, who purchase these covered calls and subsequently need to hedge their positions—often by selling spot Bitcoin, which further drives prices downward.
Market Dynamics: Options Trading Creates Sell Pressure Despite ETF Interest
The cryptocurrency landscape has evolved dramatically in recent years, with Bitcoin diverging from its previous correlation with technology stocks in the latter half of 2025. While many analysts had previously noted Bitcoin’s close relationship with tech stock performance, a notable separation occurred as traditional stocks continued reaching all-time highs while Bitcoin experienced a significant decline to approximately $90,000. This decoupling challenges conventional wisdom about Bitcoin’s relationship with traditional financial markets and raises questions about the internal market dynamics that might be governing cryptocurrency prices.
Investigation into these market movements reveals that the Bitcoin being used to back these options contracts has typically been held for multiple years, indicating that this activity doesn’t represent new demand or fresh liquidity entering the cryptocurrency ecosystem. Instead, the covered call strategy employed by long-term holders creates a situation where existing Bitcoin is being leveraged to generate yield through options premiums, but the secondary effects of this activity introduce selling pressure that isn’t offset by corresponding new investment. Market observers note that as whales continue to pursue short-term profits through covered call strategies with their substantial holdings, Bitcoin’s price volatility may persist or even increase.
The influence of these options market activities cannot be underestimated, according to Park’s analysis. The cryptocurrency market’s relatively smaller size compared to traditional financial markets means that actions taken by large-scale holders can have outsized effects on price movement. With Bitcoin whales controlling significant portions of the circulating supply and increasingly engaging in sophisticated trading strategies borrowed from traditional finance, the market dynamics become more complex than simple supply and demand equations might suggest. This emerging behavior pattern among veteran Bitcoin investors marks a maturation of the cryptocurrency market but also introduces challenges for price stability that weren’t present in earlier market cycles.
Future Outlook: Federal Reserve Policy and Bitcoin’s Recovery Potential
Despite current downward pressure, numerous market analysts remain optimistic about Bitcoin’s medium to long-term prospects, particularly as macroeconomic conditions evolve. Several experts have forecasted that Bitcoin will experience a renewed surge when the U.S. Federal Reserve continues implementing interest rate cuts and injects additional liquidity into the financial system. These monetary policy changes typically signal favorable conditions for risk assets, potentially including cryptocurrencies like Bitcoin that have historically benefited from expansionary monetary environments.
Data from CME Group’s FedWatch tool indicates that approximately 24.4% of traders anticipate another rate cut could be considered at the Federal Open Market Committee (FOMC) meeting scheduled for January next year. This market expectation suggests that economic conditions might warrant continued easing of monetary policy, which could create a more favorable environment for Bitcoin price appreciation. However, not all analysts share this optimistic outlook, with some technical analysts suggesting Bitcoin might experience further decline to reach as low as $76,000 before finding solid support.
Trader Roman, operating under the username @Roman_Trading, recently shared analysis indicating preparation for an additional 17% decline in Bitcoin’s price. Market observers acknowledge that BTC/USD has struggled to recover after touching recent lows near $80,000, instead trading within a gradually ascending channel pattern that fails to break key resistance levels. This technical perspective highlights the ongoing tension between bullish fundamental factors—such as institutional adoption through ETFs and potential monetary easing—and bearish technical signals exacerbated by the options trading activities of long-term holders. As these competing forces continue to shape the cryptocurrency market, investors face a complex landscape where traditional market analysis must be complemented by understanding of the unique dynamics within the cryptocurrency ecosystem, particularly the influence of early adopters whose trading strategies have evolved alongside the maturing market.
