BTC Faces Short-Term Pressure After Failed Breakout

• Bitcoin stays below key EMA resistance, keeping short-term momentum tilted toward sellers
• Support near $88K remains critical as losing that zone could open a deeper downside move
• Falling open interest and choppy spot flows suggest post-rally risk reduction continues

Bitcoin dropped back into a short-term downtrend on the 4-hour chart after failing to defend its prior breakout area. After topping near $97,971, BTC reversed sharply and slipped below its EMA cluster, which often signals weakening momentum. 

Consequently, traders now watch whether the latest bounce can hold, or if it remains a brief corrective move. Bitcoin recently traded near $89,464, with price still sitting under several heavy resistance zones that could limit upside attempts.

BTC Price Trend Shows Sellers Still Control Momentum

Bitcoin faces its first rebound cap near $90,758, which now acts as a near-term pivot. Additionally, the $91,629 to $91,816 range stands out as a former structure zone with added EMA pressure. A stronger resistance band sits between $92,445 and $92,874, where sellers may defend aggressively. 

Hence, BTC needs a clean break above this area to improve sentiment. Bulls would likely need to reclaim $95,480 to reset the short-term trend in their favor.

On the downside, Bitcoin tests immediate support around $89,606, which aligns with a key Fibonacci level. However, the $88,000 to $87,777 demand zone remains the main area holding the chart together.

If BTC loses that region, selling pressure could accelerate toward $87,630. Moreover, a deeper slide could expose $84,436 as the next major swing support.

Leverage Cools as Open Interest Pulls Back

Bitcoin open interest expanded strongly through 2025 as leverage increased alongside price strength. Significantly, the late-2025 rally pushed open interest toward cycle highs above the $80B area. That buildup did not last. 

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As BTC pulled back from the peak, open interest declined, signaling traders reduced risk and closed positions. By Jan. 21, 2026, open interest sat near $60.44B while BTC traded around $88,348, pointing to post-shakeout consolidation.

Spot Flows Stay Choppy as Tom Lee Flags 2026 Risk

Spot flows leaned negative for long stretches, with repeated outflow bars showing steady distribution. Besides that, short inflow spikes appeared during stronger pushes, but they did not last long. 

Outflows surged heavily in mid-to-late November and aligned with a sharp dip. After that flush, flows stayed mixed, though the latest reading showed a net inflow near $107M.

Fundstrat research head Tom Lee also warned that 2026 could bring a painful decline across crypto and broader markets. Additionally, he said Bitcoin could still reach a fresh all-time high this year if the market fully recovers. Lee also flagged a possible 15% to 20% stock market correction, with policy shifts shaping which sectors outperform.

Technical Outlook for Bitcoin (BTC)

Key levels remain well-defined as Bitcoin trades through a volatile reset phase. 

Upside levels include $90,758 as the first rebound hurdle, followed by $91,629–$91,816, where prior structure and EMA resistance converge. A stronger breakout could open a path toward $92,445–$92,874, the key resistance ceiling that must flip to restore short-term bullish momentum. Beyond that, $95,480 stands as the level that would reset broader trend bias.

On the downside, $89,606 acts as immediate support. Below that, the $88,000–$87,777 demand zone remains critical. Failure to hold this area risks deeper downside toward $87,630 and potentially $84,436. The technical picture suggests BTC is consolidating after a sharp deleveraging move, with momentum still favoring sellers below the EMA band. 

Will Bitcoin stabilize or extend lower? 

BTC’s near-term direction hinges on whether buyers can defend $87,777 long enough to challenge the $91,600–$92,800 resistance cluster. Compression, cooling open interest, and mixed spot flows point to rising volatility ahead. A clean reclaim of resistance could revive upside momentum, while a breakdown risks extending the correction.

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