The reason Bitcoin can't break through 90,000 has been found! The giant whale's "cover" strategy is the culprit

Bitcoin prices hover around $90,000 with a flat trend, despite strong inflows into spot ETFs. Market analyst Jeff Park points out that this abnormal phenomenon mainly stems from long-term holders selling covered call options, rather than weak spot demand. Large Bitcoin whales are quietly suppressing spot prices through widespread covered call sales, leveraging the options market to extract short-term gains from Bitcoin held for over ten years.

Why Are Whales Suddenly Enthusiastic About Covered Call Strategies

(Source: Deribit)

Bitcoin struggles to regain upward momentum around $90,000, which may be less about weak demand and more about how long-term holders manage their risk exposure. Bitcoin veterans are turning to covered calls to generate income from their long-term holdings. A covered call involves selling call options on Bitcoin they already own, allowing sellers to collect premiums while granting buyers the right to purchase Bitcoin at a predetermined price.

This strategy is increasingly favored by long-term holders, often called “OGs,” who accumulated Bitcoin years ago and now use options markets to earn short-term income. For whales holding Bitcoin for over ten years, covered calls offer a win-win: maintaining their Bitcoin holdings while earning premiums from selling call options.

The popularity of this strategy has practical reasons. Bitcoin’s price has been consolidating around $90,000, lacking clear catalysts for a short-term rally. For whales with large Bitcoin holdings, instead of waiting for a breakout, they prefer to earn steady premiums weekly or monthly by selling call options. Based on current volatility, selling a one-month call with a strike price of $100,000 could fetch a premium of about 2%-3%. For whales holding thousands or even tens of thousands of Bitcoins, this can generate significant cash flow.

However, Park emphasizes that the impact of this strategy extends beyond the options market. When you sell long-term Bitcoin call options, the only new market risk exposure comes from the options selling itself. This risk is negative, making sellers a net source of downward pressure. Since the Bitcoin backing these options already exists and does not represent new demand, this strategy cannot add new liquidity to the market.

Market Maker Hedging Mechanism Transmits Selling Pressure to Spot

Why does the covered call selling by whales suppress spot prices? The answer lies in the hedging mechanisms of market makers. Market makers who buy these options must hedge their risk exposure, typically by selling spot Bitcoin. This hedging activity creates ongoing selling pressure, which can push prices down or limit upward movement.

The logic for market makers’ hedging is straightforward. When they buy Bitcoin call options, they are exposed to Bitcoin price increases. To maintain delta neutrality (where price movements do not affect their profit and loss), they must sell a certain amount of spot Bitcoin. The amount depends on the option’s delta, usually between 0.3 and 0.7. As Bitcoin’s price rises or falls, market makers dynamically adjust their hedge positions, and this rebalancing continually generates buying or selling pressure.

The key point is the directional effect. When whales sell large amounts of covered calls, market makers need to buy these options in large quantities, then sell spot Bitcoin to hedge. This mechanism transmits the options market’s selling pressure into the spot market. Park states that this hedging activity results in persistent selling pressure, shifting price influence toward derivatives trading, with options trading increasingly dictating short-term price movements.

Three-Step Mechanism of Covered Calls Suppressing Bitcoin Spot

Whales sell calls to collect premiums: Long-term holders sell large quantities of calls with strike prices between $100,000 and $120,000 to generate cash flow.

Market makers are forced to sell spot to hedge: Market makers buying these calls must sell spot Bitcoin to maintain delta neutrality.

Continuous selling pressure limits upside potential: As whales keep selling new calls, the hedging selling pressure from market makers persists.

This trend aligns with Bitcoin’s decoupling from the US stock market in the second half of 2025. Despite major stock indices reaching new highs, Bitcoin has retreated from early peaks and hovers around $90,000. Some analysts previously pointed out correlations between Bitcoin and tech stocks, but recent price movements suggest different forces are now at play.

Why ETF Inflows Cannot Drive Price Breakouts

(Source: Deribit)

Park explains that this dynamic helps explain why, despite continuous ETF inflows, Bitcoin’s price remains volatile. The biggest contradiction in the current market is: on one side, institutional investors are buying through ETFs; on the other, the price cannot break through $90,000. Conventional logic suggests strong ETF inflows should push prices higher, but the covered call mechanism offsets this buying pressure.

The root of this contradiction lies in the nature of the capital. ETF inflows represent long-term allocation funds, with institutional investors typically holding positions for the long term and not trading frequently. In contrast, market maker hedging is high-frequency and mechanical; they must constantly adjust their positions as prices fluctuate. This high-frequency hedging generates selling pressure in the short term, enough to offset the long-term buying from ETF inflows.

Looking ahead, opinions remain divided. Some analysts expect that if the Federal Reserve continues to cut interest rates, Bitcoin will resume its rally, as rate cuts inject liquidity into financial markets. The CME FedWatch tool shows a 24.4% probability that the January FOMC meeting will cut rates again. However, others remain cautious, warning that if the selling of call options continues and macroeconomic conditions do not improve, Bitcoin could fall further, with some predicting prices near $76,000.

Last week, CEX reported that after a period of significant deleveraging and panic selling by short-term holders, the market showed signs of “seller fatigue.” This could mean that selling pressure has been fully released, and once the wave of covered call selling subsides or the Fed provides new liquidity, Bitcoin could restart its upward trend. Monitoring open interest changes in the options market is key; if whales stop selling new calls, the hedging selling pressure from market makers will disappear.