Bitcoin Briefly Loses $120K as Options Expiry Triggers Volatility || Oct 10, 2025
Market reacts to bearish positioning, rising dollar strength, and shifting macro tone
🪙 Crypto Market Overview
Bitcoin dipped below 120,000 USD briefly, as a mix of options-driven positioning, macro headwinds, and rising volatility pressured prices. The move comes just ahead of a major $5.3B options expiry, which has acted as a magnet for short-term trading flows.
Data from Deribit indicated a max pain level near 117,000 USD for BTC and 4,400 USD for ETH, levels that may keep the market rangebound through the weekend. Options dealer positioning also turned deeply negative on volatility metrics, signaling expectations for two-way price swings.
⚡ Heightened Volatility Drivers
Multiple factors are now feeding into this turbulence:
The U.S. Dollar Index (DXY) has strengthened notably this week, draining liquidity from risk assets.
Rate-cut expectations have faded amid renewed inflation concerns.
China’s new export restrictions on rare earth materials have added fresh macro uncertainty ahead of the upcoming Trump Tariff meeting.
In technical terms, Bitcoin’s decline also aligns with a previously noted bullish divergence on USDT Market Cap Dominance, which tends to coincide with short-term crypto weakness.
📊 What Happens Next
All eyes are on 120,000 USD — the make-or-break support level for Bitcoin.
If BTC can defend 120K, it would signal that the worst of this pullback is over.
A sustained drop below 118,000–117,500 USD would confirm the bearish divergence and likely extend the correction.
Conversely, a daily close above 121,890 USD would mark early signs of stabilization and potential recovery.
Recent price action continues to mirror the XABCD corrective pattern, suggesting one final shakeout before any new upside attempt.
🌐 Broader Market Context
Momentum indicators are showing mixed signals but could soon flip:
Short-term models indicate a 4-hour buy setup may trigger soon for BTC, while ETH could see a similar 12-hour bullish signal into the weekend.
Our trend model has stopped declining for the first time in weeks — a sign that Bitcoin may be nearing an inflection point.
Meanwhile, the USDT dominance chart suggests one more upward push is possible, which might correlate with another quick dip in BTC before a rebound.
The key takeaway: a strong weekly close back above 120K would preserve the broader bullish structure.
🎯 Strategy Outlook
Short-Term (Days): Long bias maintained. Watching 118K–120K for support confirmation.
Medium-Term (Weeks): Bullish above 121K; momentum improves on reclaiming 126.5K.
Long-Term (Months): Cycle projection toward 230K remains valid unless 72K fails.
🧭 Strategy Notes
Options expiry volatility likely to fade after the weekend.
A fake daily close below 120K is tolerable; sustained weakness is not.
Watch for 121.8K reclaim as confirmation of renewed strength.
ETH and SOL setups could signal early reversal cues for altcoins.
🔑 Key Takeaways
Options expiry and macro crosscurrents drove BTC below 120K.
Max pain levels suggest short-term suppression near 117K.
Dollar strength and inflation fears weigh on risk assets.
120K support remains pivotal; rebound could reset the bullish structure.
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