Bitcoin May Slide Down to $105K, If It Loses This Critical Level

Bitcoin teeters on the edge—losing this crucial support could trigger a slide toward $105K.

Market watchers hold their breath as BTC tests key technical thresholds. A break below current levels might just open the floodgates for a significant correction.

Traders scramble while analysts debate whether this is a healthy pullback or the start of something more serious. Either way, volatility's back on the menu—just another day in crypto's relentless rollercoaster.

Remember when traditional finance said crypto was too volatile? Meanwhile, the S&P's having its own midday meltdown over a 0.25% rate hike whisper.

Record Options Expiration Looms

Glassnode’s data shows that fears of a major price decline have lessened since the Fed’s announcement. While the spot market showed some minor selling pressure, risk-off positions in the derivatives market noticeably increased.

Open interest in the perpetuals market has slightly decreased. Glassnode noted that open interest, which had peaked at 3.95 million BTC, has now dropped to 3.78 million BTC. An analysis of liquidation data shows that while short positions were squeezed just before the rate announcement, the proportion of long position liquidations increased after the rate cut.

The potential for major volatility remains, however, as the open interest in the options market has hit a record high of 5 million BTC. A record amount of these options are set to expire next Friday, on September 26.

Drop Below $115,200 Could Break Momentum

Glassnode suggests paying close attention to the Bitcoin options’ “max pain” price. With both a price increase and decrease on the table, a large-scale liquidation event on either side could have a significant impact on the spot price.

The current max pain price for long positions is $112,700, while for short positions it’s $121,600. As of this article’s writing, Bitcoin’s price is fluctuating around $116,990.

Most of the bitcoin traded on-chain since the September FOMC has been above $115,200. Glassnode states that maintaining this price level is key to preserving momentum, while losing it risks a drop to $105,500.

Ultimately, staying above $115,200 WOULD maintain demand-driven momentum, while a drop below that level risks a retraction into the $105,500 to $115,200 range. Glassnode concludes that a comprehensive look at the on-chain signals suggests that market participants may be in a state of waiting for Bitcoin’s direction to be decided.