Bitcoin News Today: Bitcoin Eyes $118K “Dead Cat Bounce” Ahead of CPI — Leverage and Altcoins Flash Early Signals

Key TakeawaysBitcoin (BTC) rebounded above $111K, but bears warn of a “dead cat bounce” before a possible retest of $102K.Short squeeze risk rises, with $116K–$117K liquidity clusters attracting traders’ attention.US CPI data will be released Friday despite the government shutdown, shaping Fed rate cut odds.Leverage is returning to crypto markets after the $19B liquidation cascade, signaling cautious optimism.Bitcoin dominance faces potential reversal as altcoins prepare for recovery.1. Bitcoin Bulls Eye Relief Rally — But $118K Could Be a TrapBitcoin (BTC) began the new week in recovery mode, climbing above $111,000 after a turbulent October that saw prices dip to $102,000 during the “Black Friday” crash.Data from Cointelegraph Markets Pro and TradingView showed buyer strength reemerging in Asian trading hours, helping BTC regain short-term momentum after closing the previous week near $108,600.Traders, however, remain divided.Analyst CrypNuevo noted a “cluster of short liquidations” between $116K–$117K, hinting at the potential for a short squeeze if bulls push higher.“Upside imbalances are the key zones to watch going forward,” he said.Meanwhile, investor Ted Pillows cited easing US–China trade tensions as a catalyst for a potential rally, calling $112K a crucial reclaim level.Still, several technical analysts, including Roman, warned that Bitcoin’s low volume and bearish divergences on longer time frames could signal exhaustion rather than strength.Roman expects a rebound to $118K could form a head-and-shoulders pattern, calling it a “bearish retest” rather than a sustainable breakout.2. US CPI Data to Arrive Despite Government ShutdownFriday’s Consumer Price Index (CPI) release will go ahead despite the U.S. government shutdown, marking the first Friday CPI report since 2018.The data will be closely watched by the Federal Reserve, which meets on Oct. 29 to decide the next interest rate move.“This comes during a pivotal time for the Fed as they debate whether to continue rate cuts,”noted The Kobeissi Letter on X.Markets currently expect a 0.25% rate cut, according to CME Group’s FedWatch Tool. A lower-than-expected CPI reading could boost risk assets, including Bitcoin, by reinforcing the liquidity-driven rally narrative.However, renewed US–China trade tensions remain a wild card. Markets are highly sensitive to any comments from President Donald Trump on tariffs or trade deals, which could spark renewed volatility.3. Leverage Creeps Back Into Crypto MarketsAfter October’s $19 billion liquidation wave, leverage is gradually returning to the crypto market.Data from CryptoQuant shows that Bitcoin’s estimated leverage ratio rebounded from 0.148 to 0.166 last week, suggesting that traders are reopening leveraged positions.“The uptick shows cautious optimism as traders tentatively reenter the market,”analyst Arab Chain explained.While the recovery indicates stabilizing sentiment, analysts caution that expectations for major price gains remain limited until BTC confirms support above $110K.4. Bitcoin Dominance Faces Reversal — Altseason on the Horizon?After surging to 63.5% during the Oct. 10 crash, Bitcoin’s dominance in the total crypto market cap has slipped back to 59.6%, according to TradingView.Analyst Rekt Capital said BTC dominance has “confirmed a loss of its macro uptrend”, flipping the 60% and 64% levels into resistance.“Losing the 57.68% support level could kickstart a major Altseason,” Rekt Capital noted.Altcoins remain suppressed — a basket of Binance’s top 50 altcoin futures is still below pre–2022 bear market levels — but technical signals suggest a rotation may be brewing if BTC consolidates.5. Sentiment Shifts From Fear to ReliefDespite macro uncertainty, risk appetite is cautiously returning.Traders are watching whether Bitcoin can sustain above $111K without filling the $102K wick on Binance — a move that would confirm stability ahead of key macro events.If short squeezes materialize around $116K–$118K, Bitcoin could see its largest recovery bounce since July, but analysts remain wary of labeling it the start of a new bull leg, according to Cointelegraph.