Bitcoin dominance climbs to 57% as crypto market stabilizes post-$1.7B flush

The crypto market is cooling off after a wild selloff wiped out over $1.7 billion in leveraged trades yesterday, according to data from CoinGlass.

Bitcoin (BTC) is still above $112,000, Ethereum (ETH) is hovering close to $4,100, and traders are now trying to figure out what the hell just happened. While crypto wrestled with panic, U.S. stocks kept rising after President Trump’s Fed cut interest rates by 0.25%, and gold prices hit new records.

Just a few days ago, everyone was riding the altcoin wave. Tokens like ASTER, HYPE, and PUMP exploded as speculators piled in, convinced altcoin season was finally back. But the bottom fell out fast. There was no obvious reason, but the damage was clear. The Altcoin Season Index crashed from nearly 100 down to 65. Meanwhile, BTC dominance climbed to 57%, while ETH’s share of the market slid to 12%. Traders dumped riskier bets and ran straight back into Bitcoin.

Institutions buy through the chaos, eye October breakout

Despite the wreckage, institutions aren’t blinking. Firms like Strategy and Metaplanet are still buying Bitcoin. And last week’s spot ETF inflows prove that some are still looking to scoop up the dip.

Even after the mess, Bitcoin is up 4% for the month in a month that’s usually trash for crypto. And with October coming up, which historically delivers Bitcoin’s best returns, traders are already placing serious bets. Call options between $120,000 and $125,000 are drawing real demand.

For the past quarter, BTC has been stuck between $110,000 and $120,000. Volatility has been muted, mostly because altcoins have hogged the spotlight. But that flipped fast after the $1.7 billion flush. Now attention’s shifting back to BTC, and what happens next might depend on this week’s economic data.

Federal Reserve Chair Jerome Powell will speak on Wednesday, and the Core PCE inflation numbers hit on Friday. If inflation looks under control, traders will likely expect more rate cuts from the Fed. More cuts means more liquidity, and more fuel for Bitcoin to run.

The chaos is also playing out in the options market. Traders are placing their biggest bets on two opposite ends: either Bitcoin tanks below $95,000 or blasts through $140,000. That’s what’s on the table. There’s no middle ground right now. Everyone’s expecting drama, not calm.

Short-term traders flood options market ahead of expiry

There’s nearly $23 billion worth of BTC and ETH option contracts set to expire this Friday. That’s one of the biggest expiries ever, and it’s making people nervous. Short-term contracts are all the rage. These “out-of-the-money” bets are cheaper to buy and only pay off if prices move fast and far.

The earlier rally this year was driven by crypto treasury firms, public companies that raised money just to buy Bitcoin and other tokens. But those firms have slowed down. Falling share prices have cut off their ability to raise fresh capital. That’s dragged down demand and added even more pressure to the recent slide.

A big number that traders are watching is the short-term holder cost basis, which now sits at $111,400. That level is seen as the battleground between bulls and bears. If Bitcoin trades below it for long, it could mean the market’s sliding into bearish territory.

Data from futures markets shows the hit to leverage. Open interest in BTC futures dropped from $44.8 billion to $42.8 billion as Bitcoin fell to $113,000. That tells you a lot of leveraged players got wrecked. But clearing out all that excess leverage can help reset things.