Analysis suggests that long-term Bitcoin (BTC) holders are using a 'covered call' strategy, which is suppressing the spot market price.
Market analyst Jeff Park has diagnosed that long-term holding whales, or "OGs," are injecting abnormal selling pressure into the market through a call option selling strategy. This strategy involves selling call options, which grant investors the right to buy an asset at a specific price in the future, and then collecting the option premium.
The problem is that market makers who buy these call options are selling physical Bitcoin on the market to hedge their risk. This, they explain, limits Bitcoin's price growth, despite its high demand among traditional financial ETF investors.
Accordingly, long-term holders' use of option strategies to secure profits is leading to a structure that limits short-term upward price momentum. In particular, it is pointed out that market makers' active hedging is creating a sell-off effect.
๐ Market Interpretation
Despite strong buying demand for Bitcoin (BTC) due to the spread of covered call strategies, spot prices are showing signs of suppression. This is a structure where whales' strategic moves are creating short-term downward pressure across the market.
๐ก Strategy Points
Even long-term holders often choose covered calls as a means of profit-taking, reflecting market trends. However, this strategy carries a substantial potential for loss in addition to the option premium gains. Therefore, general investors must fully understand volatility and hedging structures.
๐ Glossary
Covered Call: A strategy that sells a call option (purchase right) on the same asset while holding the underlying asset. The option premium is taken as profit, and if the stock price rise is limited, additional profits are reduced.
Market Maker: A participant who acts as a liquidity provider, simultaneously submitting buy and sell orders and coordinating transactions to ensure smooth transactions.
TP AI Precautions
This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
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