Key points:
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Bitcoin market participants bet on a fresh short squeeze as liquidity piles into exchange order books around price.
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Late shorts are on the radar after a trip to punish longs the day prior.
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Bitcoin is regaining its command of the total crypto market cap.
Bitcoin (BTC) bounced from a trip toward $117,000 on Thursday amid hope for a “massive” squeeze of BTC short positions.
Bitcoin sets the stage for upward price spike
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dropping to local lows of $117,200 on Bitstamp.
This served to clear a portion of bid liquidity on exchange order books, but on the day, it was asks on the radar for market participants.
Data from monitoring resource CoinGlass confirmed a large build-up of overhead liquidity above spot price, helped by Wednesday’s dip below $118,000.
As Cointelegraph continues to report, such liquidity clusters tend to have a “magnet” effect on price, with late entrants often punished by snap moves up or down.
“Bitcoin liquidity is piling up on the topside,” trader and investor Mister Crypto said about the current setup in a post on X.
“A massive short squeeze is inevitable!”
Fellow trader Crypto Rover described the short squeeze scenario as an “obvious” next step.
The day prior, trader Daan Crypto Trades argued that $120,000 and $115,000 were the key price levels to monitor.
“$BTC Still stuck within this range. Lots of positions on both sides now,” he said.
“Eyes on those liquidity clusters below $115K & $120K. Would assume price wants to take both of those out at some point.”
BTC crypto cap dominance bounces back
In a growing turnaround, altcoin momentum showed signs of struggle as Bitcoin started to regain control of the total crypto market cap.
Related: ‘Altseason is here’ — 5 things to know in Bitcoin this week
BTC dominance was up 0.5% on the day, building on an existing comeback after nearly hitting 60%.
Commenting on the interplay between Bitcoin and altcoins, trader and analyst Rekt Capital noted that Bitcoin was still holding higher ground.
“The Altcoin market is reacting as if Bitcoin has broken down from its Range. But it hasn’t,” he said on Wednesday.
“In fact, it’s retesting the Lower High and Range Low as support. The retest is in progress.”
Earlier, Cointelegraph reported on capital rotation into alts as BTC price momentum flipped to consolidation.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
