Bitcoin News Today: Bitcoin Consolidates Near $120K as Crypto Market Cap Dips 6% Amid Profit-Taking, Fed Watch

Bitcoin’s recent price action has highlighted a tug-of-war between bullish momentum and profit-taking pressures as the cryptocurrency consolidates near the $120,000 level. After briefly surpassing this resistance, BTC/USDT reversed sharply toward the $117,000–$118,000 support zone, reflecting mounting sell-side pressure and liquidation activity. Total crypto market capitalization fell nearly 6% to $3.94 trillion, with traders locking in gains following recent record highs. Despite the pullback, sentiment remains cautiously optimistic, as evidenced by the Crypto Fear and Greed Index rising to 74, signaling a continued belief in an underlying bullish trend [1].

Altcoin performance has mirrored Bitcoin’s volatility, though a few tokens, including Pudgy Penguins (PENGU), have managed modest intraday gains of 4–6%. Most large-cap coins, however, have seen single-digit declines, with Ethereum (ETH) slipping 2.5% to $3,600 and Solana (SOL), Dogecoin (DOGE), and Cardano (ADA) losing between 6–8%. The Altcoin Season Index, which measures top altcoin performance relative to Bitcoin, retreated to 45 from 55 two days prior, underscoring renewed pressure on smaller assets [1].

Technical and on-chain data reveal a market at a crossroads. Bitcoin’s sideways consolidation has coincided with a surge in liquidation activity, with over $500 million in leveraged positions cleared in the past 24 hours. Ask-side liquidity thickening around the $120,000 level suggests aggressive selling near resistance, while CoinGlass data notes “very juicy” high-leverage positions on both long and short sides, creating volatility risk [1]. Analysts are divided on the short-term outlook: some view the correction as a healthy consolidation phase following double-digit gains, while others warn of potential further downside.

Illia Otychenko of CEX.IO described the pullback as a “healthy correction” driven by overbought RSI readings, which often prompt short-term profit-taking [1]. Trader Crypto Virtuos, meanwhile, identified a possible 6–7% correction to $113,000 based on Fibonacci retracement levels, suggesting renewed buying opportunities could emerge after a consolidation phase [1]. Conversely, Michaël van de Poppe labeled the recent move a “liquidity sweep,” warning BTC could revisit lower end of its recent range [1].

The broader market’s cautious stance is partly attributed to anticipation of Federal Reserve Chair Jerome Powell’s upcoming remarks. With the central bank entering its 10-day policy blackout period ahead of the September meeting, markets currently price in a 56% probability of a rate cut via the CME FedWatch tool. However, any hawkish signals could dampen risk appetite for crypto assets [1].

Bitcoin’s fundamental resilience has offered a counterpoint to its price volatility. On-chain indicators, including the Bitcoin Fundamental Index, suggest robust network growth and liquidity, while Bitcoin Vector noted that none of the 30 top-cycle signals tracked by CoinGlass have triggered, indicating the bull market remains intact [1]. Experts at Bitcoin Vector emphasized that “momentum has cooled, but structure and fundamentals remain solid,” with price lagging behind underlying data [1].

Market dominance metrics paint a nuanced picture for altcoins. Bitcoin’s dominance fell to 60.7%, its lowest level since mid-July, as Ethereum’s market share rose to 11.3%. Analyst Ted Pillows highlighted a potential double-top pattern on Bitcoin’s dominance chart, suggesting a deeper correction could unlock capital rotation into altcoins [1]. Such a shift would align with historical trends, where reduced Bitcoin dominance often precedes stronger altcoin performance as traders seek higher-risk, higher-reward assets.

As of the latest data, Bitcoin traded near $118,000, down 1% in the past 24 hours, while Ethereum and other large-cap coins continued to trail BTC’s muted momentum. The market remains in a holding pattern, awaiting catalysts to reignite directional movement. For now, analysts are closely watching for a breakout or breakdown that could determine the next phase of Bitcoin’s trajectory—and by extension, the broader crypto landscape.

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[1] https://invezz.com/news/2025/07/23/bitcoin-momentum-weakens-at-120k-pengu-among-the-few-altcoins-holding-in-green/