Dead Cat Bounce to $118K? 5 Things to Know in Bitcoin This Week

Summary

Bitcoin (BTC) has clawed back to $111,000 after a weekend lull, but traders are divided on whether it's a "dead cat bounce" or the prelude to a rally toward $118,000. The article highlights five key developments: (1) BTC's price action and potential short squeezes; (2) bearish downside targets amid declining volume; (3) the upcoming U.S. Consumer Price Index (CPI) release despite the government shutdown; (4) the gradual return of leverage and risk-taking; and (5) Bitcoin dominance's potential downtrend signaling an altseason. Overall, the market shows mixed signals—bullish short-term rebounds versus longer-term bearish divergence—while external factors like macro data and easing U.S.-China trade tensions influence sentiment. The piece cautions against over-optimism, emphasizing volatility and the need for independent research.

Key Points

• BTC Price Action and Short Squeezes: BTC rebounded to $111,000 after closing the week at $108,600, with a cluster of short liquidations between $116,000–$117,000. Trader CrypNuevo highlights "upside imbalances" and queries if a short squeeze will define the rest of October.

• Bearish Downside Targets: Despite the rebound, declining volume and bearish RSI divergence on longer timeframes suggest a potential head-and-shoulders reversal, with a peak at $118,000 before filling the $102,000 wick from October 10. Trader Roman notes a "bearish retest" and volume drop, invalidating bullish setups if $117,000 breaks.

• CPI Release Amid Shutdown: Friday's CPI data, the first Friday release since 2018, arrives during the U.S. government shutdown, drawing speculation of a "bullish" report influencing the Fed's October 29 meeting (82% odds for 0.25% cut). The Kobeissi Letter highlights the unusual timing and its potential to sway rate cut debates.

• Leverage and Risk-Taking Return: Bitcoin's estimated leverage ratio rose from 0.148 to 0.166 last week, indicating cautious re-engagement. CryptoQuant's Arab Chain sees this as a positive sign of restored confidence if BTC holds above $110,000.

• Bitcoin Dominance Downtrend: BTC dominance (59.6%) has lost its macro uptrend, validating a new downtrend and potentially kicking off an altseason if the 57.68% support breaks. Rekt Capital warns of resistances at 60%, 64%, and 70%, with altcoins lagging in a bearish divergence.

Critical Analysis

The article strikes a balanced yet cautious tone, effectively weaving trader optimism (short squeezes, leverage rise) with bearish red flags (declining volume, RSI divergence, unfilled wicks), underscoring Bitcoin's range-bound state amid macro uncertainty. The 82% FOMC cut odds and CPI timing are timely catalysts, but the piece underplays the shutdown's broader impact—delayed SEC reviews for 92 ETFs could stifle altseason momentum, amplifying dominance's downtrend. Rekt Capital's altseason trigger at 57.68% is insightful, but the narrative glosses over altcoins' recent 30% memecoin tumble on BNB Chain, ignoring how fake volumes (25% of exchanges) distort signals. Roman's head-and-shoulders warning is compelling, but historical "Pumptober" 20% rallies post-green Septembers suggest a 60–80% breakout probability. Overall, it's a trader-focused snapshot that excels at highlighting contrasts but could deepen macro ties (e.g., 2.7% inflation's hawkish risk) for fuller context in a $3.81 trillion market of greed (Index at 71) and fear.

Supporting Data

Metric	Value	Significance	Source
BTC Close (Last Week)	$108,600	Baseline for rebound	Cointelegraph Markets Pro
Current BTC Price	$111,000	2% rise from close	TradingView
Short Liquidation Cluster	$116,000–$117,000	Potential squeeze trigger	CrypNuevo
BTC Dominance	59.6%	Downtrend confirmed	Rekt Capital
Altseason Trigger	Below 57.68%	Altcoin rally signal	Rekt Capital
BTC Leverage Ratio	0.166 (up from 0.148)	Risk-taking return	CryptoQuant
FOMC Cut Odds (Oct 29)	82% for 0.25%	Policy catalyst	CME FedWatch Tool
CPI Release Date	Friday (first since 2018)	Amid shutdown	Kobeissi Letter

Conclusion

Bitcoin's rebound to $111,000 below $116,000–$117,000 resistance sets up a high-stakes October, with short squeezes and leverage rise offering bullish hints amid 82% FOMC cut odds. Yet, declining volume, bearish divergence, and dominance's downtrend (59.6%) warn of a $118,000 peak before wick fills or altseason at 57.68%. As CPI looms amid shutdowns, the market’s mixed signals favor caution—Pumptober’s 20% average rally is possible, but macro surprises could shatter it. In a $3.81 trillion realm of greed and fear, BTC’s next peak hinges on catalysts; traders, tread carefully.