Bitcoin has been moving closer to $80,000, but keeps failing to break above it. One major reason is that the options market is quietly holding it back. In fact, a large number of call options have been accumulated at the $80,000 level, especially on Deribit, the biggest crypto options exchange. Although these contracts pay out if Bitcoin goes above that price, market makers who sold these options are forced to hedge by selling Bitcoin as prices rise. This absorbs the buying pressure and slows down upward momentum, thereby creating resistance that makes it harder for the price to move higher.
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This helps explain why Bitcoin, even after rising more than 12% since late March, is still stuck below $80,000. According to GSR’s Andy Baehr, many traders are selling these call options because they believe $80,000 is a safe level where Bitcoin won’t break through. As a result, dealers hedge by selling Bitcoin, creating what some call an “electric fence” at that price. In addition, a large number of these options are set to expire in May and June, with about $1.5 billion in total open interest at that level.
This includes around $160 million expiring on May 1 and $566 million on May 29, which keep pressure on the price. At the same time, overall demand is not strong enough to push Bitcoin past this level. Retail investors, who helped drive the previous rally, are mostly sitting on the sidelines, either waiting or recovering from losses. Meanwhile, institutional buying is steady but not aggressive enough to break resistance. Because of this, the market has support but lacks excitement. On top of that, some traders are taking profits near $80,000, while stock market volatility is also affecting crypto.
Is Bitcoin a Good Buy?
Using TipRanks’ technical analysis tool, the indicators seem to point to a positive outlook for Bitcoin. Indeed, the summary section pictured below shows that 12 indicators are Bullish, compared to three Neutral and seven Bearish indicators.
