Long-term BTC holders depress price by selling covered calls, analysts split on rebound

Published: 2025-12-14 02:19:02 |

ProCap BTC CIO Jeff Park says long-term Bitcoin holders ("OGs"/whales) are selling covered calls against multi-year BTC positions to generate yield. That activity adds negative delta to markets: market makers who buy the calls hedge by selling spot BTC, creating downward pressure on price. Reports show the BTC used to collateralize these options has been held for years, indicating limited fresh liquidity. Park argues this options flow is a meaningful driver of recent BTC declines from highs near $90,000. Some analysts expect BTC to resume rising if the US Fed delivers rate cuts and adds liquidity, with CME FedWatch showing ~24.4% chance of a cut at the January FOMC. Others, including a trader posting under @Roman_Trading, warn of further downside to around $76,000 (roughly a 17% drop). The article highlights a split outlook: options-driven selling and hedging pressure weighing on spot in the short term, while macro rate easing could support risk assets and revive BTC in the medium term.

Bearish

Selling covered calls against long-held BTC introduces persistent negative delta: options buyers (market makers) hedge by selling spot BTC, creating mechanical downward pressure. The article notes the BTC used as collateral is not new liquidity, amplifying the effect. Historically, large options-driven hedging flows have caused temporary price weakness (e.g., prior expiries and quadruple witching events). In the short term this increases volatility and tilts the market bearish as hedging sales depress spot. In the medium term, macro factors (Fed rate cuts/liquidity) could offset these flows and turn sentiment bullish, but only if liquidity arrives and demand from new investors (e.g., ETF inflows) resumes. Given current described dynamics — concentrated holders monetizing via covered calls and market makers hedging into spot sales — the immediate impact is bearish for BTC price action until those option positions roll off or fresh buying emerges.