Why is Bitcoin Dropping? (September 2025 Analysis)
Bitcoin has recently fallen towards the $109,000 level, raising questions among traders and investors: why is Bitcoin dropping, and what comes next?
Let’s break down the main reasons behind the move and what the charts suggest going forward.
1. Options Expiration Pressure
One of the biggest drivers of the recent dip is the largest weekly and quarterly Bitcoin options expiry in history — over $18B in notional value (Source: Deribit).
- The Max Pain point stood around $110,000, which acted like a magnet for price action.
- Such expirations often increase volatility as traders and market makers adjust their hedges.
Ethereum also faced pressure, with its own max-pain level near $3,700, adding to overall market weakness.
2. Key Technical Levels
From a technical perspective, Bitcoin’s breakdown below $112,000 opened the door for a test of $110,000 support.
- Support zones: $109,100 – $111,300 (Weekly Bull Market Support Band).
- Critical risk: A decisive break under $107,300 would turn the short-term picture more concerning.
- Resistance to watch: A daily close back above $111,300 (former support now resistance).
3. Market Sentiment & On-Chain Signals
Despite the drop, several metrics suggest a bounce could be forming:
- Fear & Greed Index → at its lowest since April (when BTC was near $80k).
- Bid-to-Ask Ratio (Binance Spot) → strong bids showing up, often a precursor to reversal.
- Active Addresses (on-chain) → positive divergence, signaling network activity remains strong.
4. Liquidations & Positioning
According to TheKingfisher:
- Long liquidations aren’t heavy until around $105,000, which reduces immediate downside pressure.
- Short liquidations are stacked at $113,500 – $116,000, suggesting a breakout rally could squeeze shorts if momentum flips.
- Leveraged shorts remain crowded, increasing the chance of a counter-move higher.
5. ETH & SOL Follow-Through
- Ethereum (ETH): At risk of retesting $3,700 – $3,600 before finding support.
- Solana (SOL): Large bullish divergence in active addresses → potential recovery towards $240 in coming weeks.
Final Thoughts: Is This Just a Shakeout?
Drops like these are often linked to options expiry games and positioning, rather than a fundamental shift in the bull cycle.
- Only a weekly close below $98,000 would seriously challenge the broader bull market structure.
- In the short term, price action above $111,300 could confirm a rebound towards $118,000 – $120,000.
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