Bitcoin (BTC) faces another crucial weekly options expiry, with $3.4 billion in contracts set to close. While options expiry events often trigger volatility and sometimes short-lived rallies, this week’s setup signals a more subdued outlook. With bearish sentiment dominating the market, traders are now debating whether BTC can push back to $120,000 or risk slipping closer to $110,000.
Options Expiry Points to Lower Volatility
This week’s expiry on Deribit covers $3.4 billion in open interest, with put options outnumbering calls. The BTC put/call ratio rose to 1.3, reflecting a more defensive and bearish stance among traders.
Typically, options expiries on Fridays drive increased volatility, with price swings carrying over into the weekend. However, this expiry appears less likely to create fireworks. The bearish positioning signals that most traders are preparing for downside protection rather than betting on a sharp rally.
The muted outlook also reflects broader market conditions. Investors are already pricing in a 25-basis-point interest rate cut from the US Federal Reserve. Since the expectation has been factored into the market, there is little room for a surprise-driven breakout in crypto prices this week.
September Expiry Looms Large
While this week’s expiry is relatively modest, the end of September could be a turning point. A massive $17.7 billion in options are set to expire, with a clear dominance of call options. This signals that traders see greater upside potential later in the month, even if short-term conditions remain subdued.
Until then, the remaining weekly expiries in September carry lower notional values and are unlikely to trigger significant moves. This suggests that the Bitcoin market may remain range-bound in the short term, consolidating after months of record-breaking rallies.
BTC Strength Holds Despite Altcoin Surge
Despite a slight cooling of sentiment, Bitcoin remains resilient. The Crypto Fear and Greed Index has eased but still hovers in the “greed” zone, showing investor confidence is intact. BTC dominance has slipped to 55.9% as altcoins surge, delivering oversized returns compared to the leading cryptocurrency.
Ahead of the expiry, BTC traded around $115,400, while Ethereum (ETH) climbed to $4,549.37. Altcoins have stolen the spotlight with aggressive price pumps, yet their stability depends on the broader strength of BTC and ETH.
Derivatives data show robust participation. Bitcoin open interest across exchanges stands above $41 billion, while ETH’s has recovered to over $29 billion. On Hyperliquid, BTC open interest rose to $3.9 billion, with ETH at $2.9 billion, reflecting sustained trader engagement despite lower volatility.
BTC’s Next Step: $120K or $110K?
Bitcoin’s immediate price outlook is shaped by its derivatives positioning. Current data suggest Bitcoin is locked within a narrow trading range, with support around $111,000 and resistance near $116,000.
While some short positions extend up to $120,000, the majority of trading activity is concentrated in the lower band. This makes a sharp short squeeze to $120,000 less probable in the near term. On the downside, a dip to $111,000 could trigger liquidations, targeting over $75 billion in long positions.
Recent trading has already been punishing for leveraged traders. In the past 24 hours, BTC saw over $82 million in short liquidations. ETH’s unexpected rally led to an even larger $92 million in liquidations, highlighting the ongoing fragility of derivative-heavy strategies.
Consolidation After Record Highs
After setting record highs in recent months, crypto markets are now entering what has historically been a slower period. Whales are seen taking profits, rolling over positions, and waiting for clearer signals before committing to new bets.
Volatility has dropped to near record lows at 1.12%, limiting the potential for cascading liquidations. Demand for spot BTC, however, remains strong. Corporate treasuries and institutional buyers are locking away coins, reducing available supply and providing a longer-term bullish backdrop.
In the short term, Bitcoin’s price may continue oscillating within a limited range, with bursts of liquidations shaping intraday moves. However, with September’s massive options expiry approaching and institutional demand remaining high, the broader bull market remains intact.
For now, BTC’s immediate battle is clear: can it reclaim $120,000, or will it slip closer to $110,000 before the next leg higher?
