Bitwise Head of Alpha Attributes Bitcoin Price Cap to ‘OG’ Selling Pressure
Bitwise Asset Management, a major player in the crypto ETP space, has publicly attributed Bitcoin's recent struggle to break through key resistance levels to persistent selling pressure from long-term holders, often referred to as OG Bitcoin holders. Jeff Park, the Head of Alpha at Bitwise, recently commented that Bitcoin’s upside momentum remains limited because of the continued supply being offloaded by these early investors who are strategically taking profits at elevated price levels. This analysis provides a distinct perspective on the current market dynamics, moving beyond simple supply and demand narratives.
The Mechanics of the Selling Pressure
The analysis from Bitwise suggests that this "OG" selling is not primarily driven by panic or capitulation but is a deliberate, multi-faceted strategy focused on income generation and risk management. According to Park, a significant portion of the selling pressure is coming via the derivatives market, specifically from long-term holders who are actively selling call options (a strategy known as "selling upside"). This covered call strategy allows them to generate steady income against their existing, large Bitcoin holdings without having to liquidate the underlying asset immediately. This steady stream of options selling suppresses price movement by forcing market makers who buy these calls to hedge their risk. This hedging activity, in turn, contributes to a low-volatility, sideways price action and ultimately caps sharp upward moves. This effect highlights a crucial divergence: while regulated channels, particularly Bitcoin ETF options, show strong demand for upside exposure from traditional investors, the steady options selling by crypto-native long-term holders is still strong enough to offset this institutional demand.
Market Implications and Breakout Conditions
Bitwise's view highlights a fundamental tension in the current Bitcoin market structure: the clash between new institutional demand (seen in positive ETF flows and bullish ETF options) and persistent legacy supply (from long-term holders finally monetizing their holdings). Jeff Park indicated that Bitcoin could see stronger, sustained price action if one of two conditions is met. The first condition is a significant slowdown in options selling by long-term holders, which would reduce the consistent ceiling on the price. The second condition is a sharp, sustained increase in demand for Bitcoin ETF options that dramatically overwhelms the existing supply pressure from the OGs. Until one of these factors shifts decisively, the Bitwise perspective suggests that Bitcoin is likely to remain in a high-supply, lower-volatility environment, making it challenging to break out of its recent trading range despite the long-term bullish outlook shared by many analysts within the firm.