Traders are holding back, waiting for $17 billion Bitcoin options volatility to settle, or stocks to overheat, leaving a lot of capital on the sidelines.
Bitcoin could see further retracement and elevated volatility, especially with macro pressures and the $17 billion options expiry looming.
Investor appetite is shifting, and Bitcoin [BTC] is feeling the pressure.
On the macro side, the U.S. stock market is ripping. All three major indices [$DJI, $NASDAQ, and $SPX] have hit fresh all-time highs, signaling money chasing legacy markets post-FOMC.
Meanwhile, the U.S. 10-year treasury yield slipped to a quarterly low of 4.01% in mid-September, hinting that money’s chasing safer bonds while risk-on bets like Bitcoin cool off. In short, BTC’s bid wall is weakening.
Despite the 25 bps rate cut, investor conviction in BTC hasn’t returned.
Meanwhile, stablecoin supply has exploded from $204 billion in January to $308 billion in September. That’s over $100 billion in dry powder still sitting on the sidelines, ready to rotate into BTC once risk-on flows return.
The question: When does the rotation hit? Is the market waiting on a cleaner entry, a deeper rate cut, overheated stocks, or the $17 billion BTC options expiry to clear before FOMO kicks back in?
The options market is seeing heavy activity ahead of the upcoming expiry.
There is a total Open Interest (OI) of 152,549 contracts, reflecting strong participation from traders. Of these, 86,997 are call options while 65,552 are puts, producing a Put/Call Ratio of 0.75, pointing to a mildly bullish bias.
The notional value of all outstanding contracts is approximately $17.04 billion, showing significant capital at stake. Notably, the max pain price is set at $110,000, where Bitcoin could be drawn as expiry approaches.
In short, all these factors explain why Bitcoin hasn’t bottomed yet.
Traders are staying sidelined, waiting for a cleaner entry, options FUD to shake out, or stocks to overheat, keeping significant dry powder off the market. Until one of these triggers hits, BTC’s October replay looks tough.
Consequently, a deeper retracement is firmly on the table, with volatility likely to remain elevated as the market digests these macro and options-driven pressures.
