Bitcoin (BTC) is setting the stage for a potentially massive short squeeze as exchange order books signal a buildup of liquidity above the spot price, while BTC dominance rebounds sharply to 62%.
BTC Price Eyes $120K Rebound After Liquidity Flush
On Thursday, BTC briefly dipped to $117,200, shaking out overleveraged long positions. However, this drop appears to have set the groundwork for a bullish reversal, with traders now pointing to a surge in overhead liquidity as a catalyst for short liquidation.
“Bitcoin liquidity is piling up on the topside,” noted trader Mister Crypto, adding that a “massive short squeeze is inevitable.”
Data from CoinGlass shows concentrated clusters of sell-side liquidity above $118,000 — a classic condition for rapid upward price movement as shorts get caught off guard.
Late Shorts at Risk as Market Turns
With BTC trading at $118,635, analysts highlight a growing trap for late short sellers. After a long squeeze earlier in the week, short positions have piled up, betting against any upside breakout. This imbalance could lead to a violent squeeze to $120,000 or higher.
Crypto Rover called the short squeeze scenario “obvious,” and Daan Crypto Trades pinpointed $120K and $115K as the key price boundaries to watch.
This sideways trading range continues to accumulate liquidity on both sides, increasing the chances of a sudden breakout.
Bitcoin Dominance Reclaims Market Control
As altcoins begin to lose momentum, Bitcoin’s market dominance has rebounded to 62%, recovering from a recent dip near 60%. This suggests investors are rotating capital back into Bitcoin amid broader market uncertainty.
“The Altcoin market is reacting as if Bitcoin has broken down,” said analyst Rekt Capital, “but it hasn’t. It’s retesting the Range Low as support.”
This resurgence in dominance reinforces BTC’s position as the primary driver of market direction, potentially dampening altcoin performance in the near term.
Squeeze Incoming?
With overhead liquidity, positive technical support, and growing BTC dominance, the setup favors a short squeeze scenario — possibly pushing Bitcoin well above $120K. Traders should remain cautious as volatility could escalate rapidly in both directions.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.