Bitcoin declines again today, slipping below the $90,000 mark and dipping to roughly $88,794 — about a 1.46% drop over the past 24 hours.
A key driver cited for the slide is growing concern over a potential interest-rate hike from the Bank of Japan (BoJ). While no official move has been announced, traders are reacting to historical patterns: data from market analysts show Bitcoin has fallen between 23% and 31% after prior BoJ rate changes. Given Japan’s status as the largest holder of U.S. government debt, a tighter BoJ policy could push global investors toward lower-risk positions, which historically can weigh on risk assets like Bitcoin.
Upside capped by long-time holders
Bitwise Alpha chief Jeff Park notes that Bitcoin’s upside remains constrained due to persistent selling pressure from long-term holders, often referred to as OG Bitcoin holders. He explains that these investors are actively selling call options, which presses down on price movement and keeps volatility subdued.
Even as ETFs buy spot Bitcoin and call options, Park argues demand isn’t strong enough to counterbalance the ongoing options selling by these long-term holders.
Volatility has cooled considerably
Implied volatility for Bitcoin has tumbled in recent weeks. After peaking near 63% in late November, it has eased to around 44%. This lower volatility tends to lead to sideways trading and makes sharp upward moves harder to sustain. Analysts say a sustained uptick in volatility is needed for Bitcoin to break out of its current range.
ETF behavior vs. native Bitcoin options diverge
A developing pattern is the widening gap between Bitcoin ETF options and native Bitcoin options. Options linked to the iShares Bitcoin Trust (IBIT) show robust demand for upside exposure, indicating a willingness to pay for bullish bets. By contrast, Bitcoin options on crypto-native platforms show weaker appetite for upside moves. This suggests traditional investors are positioning for higher prices, while crypto-native holders may be selling into rallies.
Long-term holders continue to supply
Many early adopters of Bitcoin are employing a covered call strategy, selling options against the coins they already own. This creates steady selling pressure and nudges market makers to hedge in a way that keeps prices moving within a narrow band, contributing to a high-supply, low-volatility environment for Bitcoin.
What could shift the trend
Park identifies two potential catalysts for stronger price action: (1) a slowdown in options selling by long-term holders, or (2) a notable surge in demand for Bitcoin ETF options. Until either scenario materializes, Bitcoin may remain under pressure even with growing ETF interest and broader crypto adoption.
Bottom line: macro uncertainty and market structure continue to cap upside momentum, leaving Bitcoin hovering in a tight range as traders weigh potential rate moves and hedging dynamics.
