Long-term Holders’ Derivatives Use Caps Bitcoin Rally Near $90,000
Bitcoin’s repeated failures to sustain a move above $90,000 are being driven by long-term holders monetizing positions through derivatives rather than outright selling. Rather than reducing supply, holders sell options (eg. covered calls) and use other yield strategies; market makers hedge those option sales by selling spot BTC, creating steady sell pressure that neutralizes ETF inflows. On-chain metrics show a large share of supply unmoved for over a year, while open interest in options has risen (reported ~25% quarter-over-quarter). ETF inflows remain sizable (billions monthly), but hedging flows can absorb much of that demand (quoted estimates near $80–90m hedging sell per $100m ETF buy), producing range-bound trading around $85k–$90k. Implications for traders: expect mechanical resistance at near-term resistance levels, higher short-term noise and capped upside until either holders reduce yield strategies or spot demand overwhelms hedging volumes. Key data points: >70% of BTC unmoved >1 year (Glassnode cited), options open interest +25% QoQ, ETF inflows >$5bn last month. Primary keywords: Bitcoin, derivatives, ETFs, hedging, options. Secondary/semantic keywords included: long-term holders, covered calls, open interest, on-chain metrics, market makers.
Neutral
The report describes structural mechanics that limit upside rather than a demand collapse or new negative fundamentals. Long-term holders are monetizing via options and hedging, creating a persistent but technically driven sell flow that absorbs ETF and spot demand. Historically, similar dynamics (heavy options selling and hedging) have produced extended ranges rather than sharp declines or rallies — for example, periods in 2021–2022 where derivatives hedging capped moves until open interest and spot imbalances shifted. Short-term impact: increased volatility and resistance near $85k–$90k, making breakouts more likely to fail and favoring range-bound strategies or volatility trades (straddles, gamma scalps). Long-term impact: neutral-to-slightly-bullish fundamentals remain intact because supply isn’t being handed over; holders retain conviction. A sustainable breakout would require either a behavioral shift (less derivatives monetization) or a material increase in net spot demand that outpaces hedging flows. Traders should monitor options open interest, put/call skew, ETF net flows, and on-chain accumulation metrics (e.g., percentage unmoved >1 year) for signs the balance is changing.