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Bitcoin price is trading below $90,000 and has now slipped under $89,000, changing hands near $88,794, down 1.46% in the last 24 hours.
One of the reasons behind today’s drop is growing concern over a possible interest rate hike by the Bank of Japan (BoJ).
Although no official rate increase has been announced, traders are reacting to historical patterns. Data shared by market analysts shows that Bitcoin fell between 23% and 31% after previous BoJ rate hikes.
Japan is the largest foreign holder of U.S. government debt. A tighter BoJ policy could force global investors to reduce risk exposure, which often impacts assets like Bitcoin.
Options Selling Caps Bitcoin’s Upside
Bitwise Alpha head Jeff Park said Bitcoin’s upside remains limited due to continued selling pressure from long-term holders, often called OG Bitcoin holders.
According to Park, these holders are actively selling call options, which suppresses price movement and keeps volatility low.
“ETFs are buying spot Bitcoin and call options, but demand is still not strong enough to offset the steady options selling by long-term holders,” he said.
Volatility Drops Sharply
Bitcoin’s implied volatility has fallen sharply in recent weeks. After reaching about 63% in late November, volatility has now dropped to around 44%.
Low volatility often leads to sideways price action and limits sharp upward moves. Analysts say Bitcoin needs sustained higher volatility to break out of its current range.
ETFs and Bitcoin Show Different Market Behavior
Another trend emerging in the market is the growing difference between Bitcoin ETF options and native Bitcoin options.
Options tied to the iShares Bitcoin Trust (IBIT) show strong demand for upside exposure, meaning investors are willing to pay more for bullish bets. In contrast, Bitcoin options on crypto platforms still show weaker demand for upside moves.
This difference suggests traditional investors are positioning for higher prices, while crypto-native holders continue to sell into rallies.
Long-Term Holders Continue to Supply the Market
Many early Bitcoin holders are using a covered call strategy, selling options against Bitcoin they already own.
This adds steady selling pressure and encourages market makers to hedge in a way that keeps prices moving within a narrow range. As a result, Bitcoin remains stuck in a high-supply, low-volatility environment.
What Could Change Bitcoin’s Trend
Jeff Park said Bitcoin could see stronger price action if one of two things happens:
- A slowdown in options selling by long-term holders
- A sharp increase in demand for Bitcoin ETF options
Until then, Bitcoin may continue to struggle despite strong interest in ETFs and broader adoption.
For now, Bitcoin remains under pressure as macro uncertainty and market structure continue to limit upside momentum.