Bitcoin Dominance Rises, Altcoins Lose Ground

For several sessions, the bitcoin market has shown signs of increasing tension. An unusual accumulation of liquidity above the price and a rapid rise in its dominance rekindle speculation. In the shadow of the charts, short sellers and watchful buyers engage in a tactical duel. For several technical analysts, the scene is set: a massive short squeeze now seems inevitable.

Tensions in Order Books : The Trap Closes on Sellers

The bitcoin market shows technical signals indicating a potential sharp bullish reversal, while the momentum of altcoins accelerates. Indeed, BTC/USD dropped to $117,200 on Bitstamp, wiping out a significant portion of the buy-side liquidity positioned below the price.

This temporary pullback is interpreted by several analysts as a maneuver to trap long positions before a possible bullish recovery. Now, market attention shifts toward the upper order book area, where an accumulation of short sellers could trigger a short squeeze if the price moves up again.

“Bitcoin liquidity is accumulating at higher levels. A massive short squeeze is inevitable!” warned Mister Crypto on the social network X. He highlights the intensification of tensions around the current price.

Bitcoin liquidity is piling up on the topside.

A massive short squeeze is inevitable! pic.twitter.com/LHxbOE3a2o

— Mister Crypto (@misterrcrypto) July 24, 2025

Data from the CoinGlass platform confirms the presence of several “clusters” of liquidity located above the spot price, which mechanically increases the probability of a rapid bullish impulse.

Traders are particularly watching two critical technical zones identified by Daan Crypto Trades : “Keep an eye on these liquidity pockets located below $115,000 and $120,000“. He specifies that “There are now many positions on both sides of the market“. He notes the increasing instability of the current structure.

$BTC Still stuck within this range. Lots of positions on both sides now.

Eyes on those liquidity clusters below $115K & $120K. Would assume price wants to take both of those out at some point. https://t.co/X5Y1x4PUgs pic.twitter.com/i2pJdtrsDw

— Daan Crypto Trades (@DaanCrypto) July 23, 2025

The most important technical elements at this stage are as follows :

• The key downside level : $115,000, identified as a potential support or volatility trigger if broken ;

• A critical upside level : $120,000, a possible breaking point to activate short stops and trigger a squeeze ;

• The accumulation of liquidity above the price : a phenomenon visible on CoinGlass heatmaps, usually a precursor to sharp moves ;

• A convergence of analyses : several high-profile traders believe the market is technically ripe for a compression of short positions.

In this tense context, the slightest bullish impulse could trigger a cascade of forced buybacks by short sellers, further destabilizing the current balance.

Bitcoin Takes Control : Dominance as a Leading Indicator

Beyond purely technical analysis, another more structural dynamic draws attention: the rise of bitcoin dominance within the crypto market. Up 0.5 % on the day, it crossed the 62 % threshold, signaling a comeback of BTC strength against altcoins.

This change occurs amid a capital rotation context, where investors seem to favor caution and assets perceived as more robust. Trader and analyst Rekt Capital highlighted this situation, stating that “the altcoin market is reacting as if bitcoin had broken down below its range. But that is not the case“. Furthermore, he adds that BTC is actually “Retesting the lower high and bottom of the range as supports“.

#BTC

The Altcoin market is reacting as if Bitcoin has broken down from its Range

But it hasn't

In fact, it's retesting the Lower High and Range Low as support

The retest is in progress$BTC #Crypto #Bitcoin https://t.co/ajXaew1XyA pic.twitter.com/M5OX8dazCh

— Rekt Capital (@rektcapital) July 23, 2025

In other words, while altcoins seem to anticipate a bearish break of bitcoin, the latter maintains a technically intact or even favorable structure. This behavioral divergence between BTC and the rest of the market reflects a strengthening hierarchy.

Bitcoin, as a benchmark asset, again attracts capital at a time when uncertainty remains high. This rise in dominance could also reflect a form of operator refocusing on fundamentals, to the detriment of more volatile or speculative narrative assets.

This internal rebalancing of the crypto market is no coincidence. It could mark the return of a more traditional cycle where bitcoin leads the dance, especially as major macroeconomic or regulatory catalysts approach. If the expected squeeze occurs in this context of renewed dominance, the effect could be amplified, potentially blocking altcoins.