Bitcoin’s dance with the dollar just turned dangerous. As the US dollar strengthens to a three-week high and jobless claims come in better than expected, markets are rapidly repricing the path of Fed rate cuts — and Bitcoin is sliding toward the critical $110K zone. With a massive $17.5B options expiry landing on Friday and short-side positioning dominating across majors, the next 48 hours could deliver a sharp rejection or a violent squeeze. This is where risk pays — or punishes — fast.

What just happened

A surprise drop in US jobless claims signaled a more resilient labor market, reducing confidence in imminent Fed cuts per CME FedWatch. The result: a stronger DXY at three-week highs and broad pressure on risk assets — crypto, stocks, and even gold. Add geopolitical jitters to the mix, and bid-on-risk faded quickly.

BTC printed new local lows near $110,658, with intraday momentum fragile. Market commentary from Swissblock flagged the structure as “delicately balanced,” while order book data from TheKingfisher shows heavy short-side dominance in potential liquidations — BTC ~69%, ETH ~78%, AVAX ~96% — a classic setup where a single catalyst can flip into a squeeze.

Why this matters to traders

Into Friday’s expiry, $110K sits near max pain, making it a magnet for price. Swissblock highlights $115.2K as the reclaim level to reattempt the range highs, while a confirmed loss of $110K opens a thinner path toward $100K. With DXY rising and FOMC repricing in motion, cross-asset correlations can amplify moves.

For active traders, this is a two-way tape: the structure invites a stop-run below $110K followed by a squeeze — but losing and accepting below $110K on higher timeframes would likely extend downside.

Key levels, scenarios, and triggers

• Reclaim and squeeze: Sweep $110K, fast reclaim of $112K–$113K, momentum through $115.2K → path toward liquidity pockets above (watch $118K).
• Continuation lower: Clean loss and 4H close below $110K with rising DXY → targets $105K–$102K, then psychological $100K.
• Chop and decay: Pin around $110K–$112K into expiry as options flows suppress trend; expect whipsaws and fakeouts.
• Trigger to watch: DXY pushing fresh highs and FedWatch odds shifting further away from cuts = headwind. Any reversal in DXY or sudden short-covering = fuel for squeeze.

How to navigate the setup

• Trade the reclaim, not the knife: If looking long, wait for a confirmed reclaim of $112K–$113K with expanding volume; invalidation tight below the reclaim level.
• Respect acceptance below $110K: If price bases under $110K on 4H, avoid fading — target lower liquidity zones with measured risk.
• Manage expiry risk: Consider reducing leverage into Friday’s $17.5B options expiry; “max pain” behavior can mean engineered mean-reversions.
• Hedge intelligently: Options users can explore short-dated puts/collars for downside; momentum traders can trail stops aggressively on any squeeze.
• Monitor flows: Track order-book liquidity, liquidation heatmaps, DXY, and CME FedWatch. Don’t chase the first move — the second one often sets the trend.

Bottom line

Bitcoin is approaching a make-or-break pocket where macro headwinds, options gravity, and crowded shorts collide. The next decisive tell is whether BTC loses and accepts below $110K — or reclaims $115.2K to squeeze late shorts. Stay nimble, let levels confirm, and size for volatility.

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