Why veteran BTC holders selling covered calls may be keeping Bitcoin stuck — and what traders should watch next

Analyst claim and why traders should care

A recent analyst note argues that veteran Bitcoin holders — the so-called “OGs” — have been systematically selling covered calls and in doing so are putting a lid on price rallies. If true, this matters for anyone trading crypto: option sellers can blunt big upward moves, change how market makers hedge, and create recurring resistance at popular strike prices. That pressure can make breakouts harder and keep momentum traders guessing, even as ETFs keep sending fresh cash into the market.

Where Bitcoin stands now and why spot demand hasn’t forced a clean breakout

Bitcoin’s price has seen intermittent strength driven by ETF inflows and renewed retail interest, but every meaningful pop has run into quick selling. The story from traders on the desk is familiar: money keeps flowing into spot products, but spot buyers aren’t consistently able to push the market past obvious resistance zones. That mismatch — steady demand but failed breakouts — is what brought attention to the options side of the market.

In plain terms, ETFs and spot buyers add fuel. But if a group of holders sits on large positions and sells call options against their coins, they turn some of that fuel into foam. The cash from new buyers still arrives, yet the options sellers extract premiums and create short-term caps where they are uncomfortable with higher prices. For anyone trading short-term, that can feel like invisible hands hitting the brakes each time price approaches those strike levels.

How covered-call selling by long-term holders can blunt upside

Covered calls are simple to understand. A holder who owns Bitcoin sells a call option — a contract that gives someone else the right to buy their Bitcoin at a preset price by a certain date. The seller collects cash now (the option premium). If price stays below the strike, the seller keeps the premium and still owns the coins. If price rises above the strike, the seller may have to sell the coins at that agreed price.

Two things matter for market impact. First, when many sellers cluster at the same strike and expiry, they create a psychological and technical resistance zone: buyers know a lot of sellers would rather not let price run away. Second, the people who buy those calls often hedge or speculate; market makers who sold those calls will delta-hedge by buying or selling spot to stay neutral. That hedging can, in some scenarios, amplify moves — but the net effect of heavy covered-call selling by large coin holders is often to reduce the likelihood of a sustained rally, because large holders prefer premiums and limited upside rather than risking open-ended gains.

Put simply: covered-call selling turns upside potential into steady income for holders. It can keep price bouncy and range-bound rather than trending higher.

Market signals that back up — or challenge — the covered-call theory

There are observable pieces of evidence traders point to. Options flow and orderbooks have shown clustered call selling in near-term expiries at strikes that line up with recent highs. Open interest in those call strikes can be outsized relative to puts, and implied volatility often falls into those expiries, which is what you’d expect if sellers are confident the market will stay below those prices.

Other signals make the picture mixed. Funding rates on perpetual futures remain modest, suggesting leveraged long demand is present but not extreme. On-chain metrics show long-term holder balances are still high, but transfer volume into exchanges has ticked up at times — a sign some holders might be preparing to sell if assigned. ETF flows, meanwhile, continue to provide fresh buying, which can overwhelm options-driven pressure if big enough.

In short: options flow data points toward systematic call selling, but futures funding, on-chain flows, and ETF purchases can and do push back. The net effect depends on size and conviction on both sides.

Voices on both sides of the trade

The analyst behind the note told readers the pattern looks deliberate: concentrated call selling by long holders has repeatedly matched price ceilings. Supporters of that view say the options market is a lever that experienced holders use to monetize positions without fully exiting, and that this explains why rallies stall even amid rising demand.

Skeptics push back. They argue covered-call sales are longstanding practice and that you can’t blame them for every failed breakout. Many point out that market makers and hedgers complicate the mechanics — sometimes their hedging becomes buying, which can push price higher rather than capping it. Others note that if spot inflows accelerate, option sellers will be forced into uncomfortable hedges or assignment, which could turn caps into fuel for a fast move up.

Clear watchlist for traders and risk points to mind

If you trade this theme, focus your attention where it matters. Watch which strikes have concentrated open interest and how that open interest changes into expiries; clustered near-term strikes are the most likely to create resistance. Track daily options flow for large blocks of call selling and note whether buyers are retail or institutional desks. Keep an eye on ETF inflows and exchange spot flows: a surge of fresh buying can overwhelm option sellers fast.

Also monitor implied volatility curves — falling IV into expiries with heavy call supply supports the cap thesis, while rising IV suggests sellers are getting nervous. Funding rates and futures basis are useful real-time sentiment gauges; sharp spikes in long leverage can make any cap fragile. Finally, be prepared for quick regime shifts: if a sustained push forces option sellers to hedge or get assigned, a short squeeze or violent gamma-driven rally can follow.

Bottom line for traders: the covered-call story is plausible and it explains some of the range-bound action. But it’s one force among many. The risk is asymmetric: option sellers collect steady income until an accelerating spot demand or a volatility shock forces them to surrender upside — and when that happens, moves can be abrupt. Keep an eye on strikes, expiries, ETF flows and funding. Those signals will tell you whether the cap is holding or about to blow off.

Sources

• cointelegraph.com