Bitcoin has returned to a short-term downtrend on the 4-hour chart after failing to defend its previous breakout area. After breaking through around $97,971, $BTC It quickly reversed and broke below the EMA cluster, which often indicates weakening momentum.
As a result, traders are now focused on whether the latest rally can be sustained or if it remains a short-term corrective move. Bitcoin has recently been trading around $89,464, and the price remains below some strong resistance zones that could limit any upside attempts.
$BTC Price trends show sellers still control momentum
Bitcoin faces its first rebound ceiling near $90,758, which is the near-term pivot. Additionally, the $91,629 to $91,816 range stands out as a previous structural zone of EMA pressure. A stronger resistance band lies between $92,445 and $92,874, which sellers may defend aggressively.
therefore, $BTC A clean break above this area is required for sentiment to improve. The bulls will likely need to recover $95,480 to reset the short-term trend in their favor.
$BTC Price dynamics (Source: Trading View)
On the downside, Bitcoin is testing immediate support near $89,606, which coincides with a major Fibonacci level. However, the $88,000 to $87,777 demand zone remains the key area that holds the chart together.
if $BTC Losing this area could accelerate selling pressure towards $87,630. Additionally, a deeper decline could expose $84,436 as the next major swing support.
Leverage cools as open interest recedes
Bitcoin’s open interest expanded significantly through 2025 as leverage increased along with price strength. Importantly, the rally in late 2025 pushed open interest toward cycle highs above the $80 billion region. That build-up didn’t last long.
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as $BTC Retreating from its peak, open interest decreased, indicating traders reduced risk and closed positions. By January 21, 2026, open interest reached nearly $60.44 billion; $BTC It is trading around $88,348, suggesting consolidation after the shakeout.
Tom Lee warns of risks in 2026, spot flows remain volatile
The spot flow was negatively sloped over a long period of time, with a stable distribution of repeating outflow bars. In addition to that, a short inflow spike appeared during stronger pushes, but it didn’t last long.
Outflows spiked significantly from mid-November to late November, coinciding with a sharp drop. After this flush, capital flows remained mixed, but the latest readings showed net inflows reaching nearly $107 million.
Tom Lee, head of research at Fundstrat, also warned that 2026 could see a painful decline in crypto markets and the broader market as a whole. Additionally, he said Bitcoin could still reach new highs this year if the market fully recovers. Mr Lee also warned that policy shifts could determine which sectors outperform, leading to a 15% to 20% stock market correction.
Bitcoin technical outlook ($BTC)
The key levels remain well-defined as Bitcoin trades through a volatile reset phase.
Upside levels include the first rebound hurdle at $90,758, followed by convergence of previous structure and EMA resistance at $91,629-$91,816. A stronger breakout could pave the way to $92,445-$92,874, the key resistance ceiling that needs to be reversed to regain near-term bullish momentum. Above that, $95,480 becomes the level that resets the broader trend bias.
On the downside, $89,606 serves as immediate support. Below that, the $88,000 to $87,777 demand zone remains important. Failure to sustain this area risks further decline towards $87,630 and even $84,436. The technical image suggests that $BTC It has been firming up after a period of rapid deleveraging, and the momentum remains in favor of sellers below the EMA band.
Will Bitcoin be stable or will it fall?
$BTC’s short-term direction will depend on whether buyers can defend $87,777 long enough to challenge the $91,600-$92,800 resistance cluster. A mix of compression, cooling open interest, and spot flows suggests higher volatility ahead. If the resistance can be regained cleanly, there is a possibility that the upward momentum will be restored, but if there is a breakdown, there is a risk that the correction will be prolonged.
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