Bitcoin Nears $113K as "Max Pain" Theory Shapes Bullish Push

Bitcoin’s price has climbed to $113,000, marking a significant recovery ahead of the upcoming U.S. Federal Reserve rate decision scheduled for September 17. The move has been interpreted by some traders as a potential signal of a broader bullish trend. According to CoinDesk data, this is the highest level the cryptocurrency has reached since late August and represents the first higher high since the all-time peak of $124,000 [1]. The price increase also reflects a shift in capital inflows back into Bitcoin, as its market dominance—the share of Bitcoin within the broader crypto market—rose to nearly 59%, a two-week high [1]. This marks a reversal from recent market dynamics where capital was moving from Bitcoin into Ethereum.

The recent price movement has been attributed in part to the "max pain" theory, a concept typically used in traditional markets to predict price behavior near options expiry. According to this theory, large market participants, particularly institutions, may push prices toward levels where options buyers face the greatest losses. On Deribit, Bitcoin options worth $3.28 billion expired at 8:00 UTC, with max pain at $112,000. Bitcoin’s price rose above this level in the lead-up to expiry, aligning with the theory [1]. While the theory is widely discussed in traditional markets, its efficacy in the crypto space remains debated among traders.

Despite the recent uptick, not all analysts are optimistic. Some, like crypto investor Ted Pillows, have highlighted a lack of strong spot-market demand as a potential red flag. Pillows argued that the current rally is largely driven by perpetual futures markets rather than traditional spot trading, which could limit the sustainability of the price movement [2]. Additionally, order-book data shows thick liquidity at $114,500, raising questions about whether this is a natural price resistance point or a deliberate attempt to influence market direction [2].

Technical indicators also offer a mixed picture. Bitcoin’s price has reclaimed key support and moving average levels, including the 20-day simple moving average near $111,500. This has led some traders, including Michaël van de Poppe, to suggest that Bitcoin may follow gold’s recent performance in breaking out to new highs [2]. However, others remain cautious. Material Indicators, a trading resource, warned that while macroeconomic tailwinds—particularly the anticipated Fed rate cut—could support a return to previous highs, the market must remain vigilant about the possibility of a liquidity flush to support levels below $115,000 [2].

Looking ahead, the U.S. jobs report and the Federal Reserve’s interest rate decision will remain critical market catalysts. While the CME FedWatch tool currently suggests a 100% probability of a rate cut, the size of the cut remains uncertain. Some analysts, like Vincent Liu of Kronos Research, have expressed doubts that a rate cut will necessarily trigger a sharp rise in Bitcoin prices, particularly if economic weakness outweighs bullish sentiment [4]. Lucas from BTC Markets, meanwhile, noted that Bitcoin must hold key support levels, particularly $110,000, to maintain a constructive market structure. Beyond this, resistance levels at $113,400 and $115,400 are seen as potential targets for further upward movement [4].

Source:

[1] Bitcoin Hits $113K as BTC Dominance Approaches Two (https://finance.yahoo.com/news/bitcoin-hits-113k-btc-dominance-083413261.html)

[2] Bitcoin taps $113K as analysis sees 'return to highs' on Fed (https://cointelegraph.com/news/bitcoin-taps-113k-analysis-sees-return-to-highs-on-fed-rate-cut)

[3] Bitcoin Price Struggles Near $113K – Will Bulls Force a (https://www.mitrade.com/insights/news/live-news/article-3-1106331-20250909)

[4] Bitcoin stalls around $110000; Fed rate cut may not spark (https://www.theblock.co/post/369743/bitcoin-rate-cut-may-not-spark-rally)

[5] BTC, Stocks News: Calm Ahead of Fed Rate Cut, Storm Later (https://www.coindesk.com/markets/2025/09/08/market-storm-likely-after-september-fed-interest-rate-cut-vix-suggests)

[6] Bitcoin Holds Near $110K as Fed Rate Cut Looms (https://bitbo.io/news/bitcoin-fed-rate-cut/)