How can covered call strategies used by large Bitcoin whales apply sell-side pressure on the market?
Why is this the correct answer?
Covered calls obligate whale holders to deliver Bitcoin if option buyers exercise their contracts. This means a large holder has to sell BTC at predetermined strike prices instead of keeping it in their wallet. When those sales hit the market, they increase the available supply, creating sell-side pressure that can push prices lower. For beginners, it is like promising to sell shares in the future, adding more supply when the promise is fulfilled.
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