BTC climbs to $90,500 following a test of key support at $89,200.

Bitcoin Pulls Back to $90,500 After Early-Year Rally Fails to Break $95,000

Bitcoin (BTC) rebounded to $90,500 Thursday morning after dipping to around $89,300 earlier in the session, marking its third consecutive day of pullback. The decline follows an early-year rally that briefly lifted 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 cited lighter trading volumes and profit-taking as factors behind the pullback.

Fading expectations for a near-term Federal Reserve rate cut may also be weighing on the market. CME FedWatch 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 Near $89,200

Bitcoin tested the 50-day moving average, a widely watched trend indicator, which provided support near $89,200 during today’s bounce.

Leverage and Liquidation Risk Remain Elevated

Open interest in BTC futures and options has risen to nearly 700,000 BTC, a three-week high and roughly 75,000 BTC above the start of the year, indicating traders are adding exposure rather than reducing risk.

Perpetual futures funding rates remain positive at about 0.09%, suggesting long positions are paying shorts to maintain exposure. While traders continue buying dips with leverage, crowded long positions increase the risk of forced liquidations, which could amplify selling pressure if prices fail to move higher.

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