Bitcoin is setting up for a major move, and this time, it’s the bears who could get caught wrong-footed. After dipping to $117,000, BTC has bounced sharply. At the same time, new liquidity clusters above spot price are pointing to a classic short squeeze. If those levels are breached, the next move could be fast and violent.
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On-chain and order book data show that ask-side liquidity is now heavily concentrated above $118,000. That kind of setup tends to act like a magnet, especially when too many traders are leaning short. The conditions that caused previous liquidations are forming again, only this time it’s the short side that’s exposed.
Short Traders Stack Up as Bitcoin Builds Momentum
This week’s drop below $118,000 shook out some long positions, but the market snapped back quickly. According to CoinGlass data, bid-side liquidity was cleared out temporarily. However, sellers weren’t able to push BTC lower in a meaningful way. Instead, the heatmap shows significant liquidity building just above the current price. That tells a story.
Traders like Crypto Rover and Mister Crypto are already anticipating the next phase. With liquidity stacked on the top end and Bitcoin holding firm above support, a move higher becomes increasingly likely. This is a structural imbalance between positioning and liquidity; the perfect fuel for a squeeze.
If Bitcoin breaks $120,000, many short sellers could be forced to exit at a loss. That would create a rapid spike higher, driven not by new buying but by forced liquidations. We’ve seen this before. When short interest gets crowded, the price rips higher.
BTC Dominance Gains Ground as Altcoins Lose Steam
At the same time, Bitcoin’s dominance in the crypto market is rising. After nearly touching 60% earlier this month, dominance is now back above 62%. That signals a clear rotation of capital out of altcoins and back into Bitcoin. It’s also a sign that institutional players are favoring the stability and liquidity of BTC over smaller, more volatile assets.
Some altcoins have started to slip, even as Bitcoin holds its range. This is a key signal because it shows that BTC is not following broader weakness, but instead it is consolidating with strength. Traders like Rekt Capital note that BTC is retesting support zones successfully while the rest of the market pulls back. This type of divergence often marks the early stages of a new leg up for Bitcoin dominance and price.
Watch the $120,000 Price Level
Right now, the $120,000 level is acting as a pressure point. It represents both a liquidity target and a psychological barrier. If Bitcoin pushes through that level with strong volume, an influx of short liquidations is likely. Below that, $115,000 remains the key downside level to watch.
At the time of writing, Bitcoin is sitting at $118,542.47.
