Bitcoin Pulls Back to $90,500 After Early-Year Rally Stalls Below $95,000
Bitcoin (BTC) rebounded to $90,500 in Thursday morning U.S. trading after earlier dipping to around $89,300, marking its third consecutive day of pullback. The decline follows an early-year rally that briefly pushed BTC just below $95,000 on Monday but failed to sustain momentum, according to crypto trading firm Wintermute.
“After initial re-risking from the yearly open, the market failed to break the key $95,000 level, resulting in two-way trade as ETF outflows dominated the last two sessions,” said Jake Ostrovskis, head of OTC at Wintermute. Analysts also noted that lighter trading volumes and profit-taking contributed to the slowdown.
Adding to the pressure are fading expectations for a near-term Federal Reserve rate cut. CME FedWatch data shows the probability of easing at the Fed’s January 28 meeting has fallen to 11.6%, down from 15.5% a week ago and 23.5% a month ago.
Support Holds Near $89,200
Bitcoin is currently testing the 50-day moving average, a widely followed trend indicator that smooths price action over the past 50 trading days. Today’s bounce came near $89,200, providing short-term support.
Leverage and Liquidation Risks Rise
Derivatives data indicates growing leverage in the market. Open interest—the total number of outstanding BTC futures and options contracts—has climbed to nearly 700,000 BTC, a three-week high and roughly 75,000 BTC higher than at the start of the year. This suggests traders are increasing exposure rather than reducing risk.
Perpetual futures funding rates remain positive at around 0.09%, indicating that long positions are paying shorts to maintain exposure. Persistently positive funding during pullbacks suggests traders are buying dips with leverage. Crowded long positions heighten the risk of forced liquidations, meaning even modest price declines could trigger further selling pressure.
