Bitcoin's $110K Crucible: Short Squeeze or Downward Spiral?

The Bitcoin market is poised at a pivotal inflection point. With the cryptocurrency trading near $99,092 as of November 18, 2025, the $110,000 support level looms as both a psychological and technical fulcrum. This level, historically significant as a potential "local top", now faces a critical test ahead of the November 14 options expiry, which involves nearly $5 billion in Bitcoin and Ethereum options on Deribit according to market analysis. The interplay between this expiry, open interest concentrations, and historical price behavior raises a compelling question: Will Bitcoin's $110K support level trigger a short squeeze or a downward spiral?

The Current Market Setup: A Tug-of-War at $110K

Bitcoin's price action ahead of the expiry reveals a market in flux. The "maximum pain level" - the price point where the most options expire worthless - is currently at a level of $105,000. This suggests that traders holding out-of-the-money options face significant losses as expiration nears, creating a gravitational pull toward this level. Meanwhile, Bitcoin's 3% decline in the last 24 hours hints at growing bearish pressure, though the Put-to-Call (PCR) ratio of 0.63 indicates a cautious bullish bias, with more traders betting on upward movement.

Open interest data further sharpens the tension. Deribit's Bitcoin options show heavy concentrations around $95,000 and $100,000 puts (bearish hedges) and $108,000 and $111,000 calls (bullish bets) according to market reports. These levels form a "battleground" where short-term price action will likely hinge on whether buyers or sellers gain the upper hand. The $110K level, in particular, is a critical psychological threshold. If Bitcoin breaks below this, it could trigger a cascade of liquidations and force traders to adjust their positions, potentially accelerating a downward spiral. Conversely, a rebound above $110K might ignite a short squeeze as bearish bets are forced to cover.

Historical Precedents: Lessons from Past Expiries

History offers cautionary tales and hopeful parallels. Last year's record $15 billion Bitcoin options expiry, for instance, saw a "max pain" level at $85,000, with Bitcoin trading near $96,000 at the time. Despite the expiry's scale, Bitcoin held above $97,330, demonstrating resilience amid volatility. This suggests that while expiries can amplify short-term swings, Bitcoin's price often stabilizes post-event, especially when supported by macroeconomic optimism or strategic hedging.

Another instructive case is the September 26, 2025, expiry, which became the largest Bitcoin options expiry in history. The max pain level was near $110K, and dealer positioning in the options market played a stabilizing role, with hedging flows reinforcing key strike zones. This highlights how institutional activity can act as a buffer, preventing sharp corrections unless fundamentals or macroeconomic catalysts (e.g., FOMC decisions) intervene.

Strategic Positioning: Navigating the Crucible

For investors, the key lies in proactive positioning. Historical bearish strategies, such as buying put options and using spreads to hedge downside risk, remain relevant. The uptick in put-call delta skew - a measure of implied volatility between out-of-the-money puts and calls - underscores growing demand for downside protection. However, bullish positioning is also emerging, with experts like Adam Chu and Sean Dawson noting optimism for the fourth quarter and beyond.

Diversification is another critical tactic. Allocating a portion of portfolios to stablecoins or major cryptocurrencies can mitigate volatility during expiry events. Additionally, monitoring sentiment indicators like the PCR ratio and max pain levels can help anticipate price movements. For instance, a PCR ratio above 1 typically signals bearish sentiment, while a ratio below 1 (as seen here, at 0.63) suggests bullish bias.

The Path Forward: Short Squeeze or Downward Spiral?

The outcome hinges on three factors:
1. Institutional Hedging: If large players adjust their positions to offset risk, they could stabilize the $110K level, triggering a short squeeze.
2. Retail Behavior: A surge in retail buying or selling could amplify momentum in either direction.
3. Macro Events: Broader economic signals (e.g., U.S. policy shifts) could override technical factors.

If Bitcoin breaks below $110K, the path to $95K becomes vulnerable, with the $90K level as the next critical support. A failure to hold $110K could lead to a downward spiral, exacerbated by leveraged long liquidations. Conversely, a rebound above $110K might see a rally toward $111K, where open interest is concentrated, potentially igniting a short squeeze as bearish positions are forced to cover.

Conclusion

Bitcoin's $110K crucible is a test of both technical strength and market psychology. The November 14 expiry, with its $5 billion in options, adds a layer of complexity, as traders juggle hedging, speculation, and risk management. While historical data suggests resilience post-expiry, the current setup - with max pain at $105K and bullish PCR ratios - indicates a precarious balance. Investors must weigh the risks of a downward spiral against the potential for a short squeeze, using hedging, diversification, and sentiment analysis to navigate this volatile juncture.