Bitcoin’s recent start-of-year rally encountered significant friction as it approached the $93,000 mark

Lede

Bitcoin’s recent start-of-year rally encountered significant friction as it approached the $93,000 mark. This level has proven to be a formidable barrier, with the cryptocurrency experiencing a rejection that sent prices back toward its weekly lows. Specifically, the market saw Bitcoin slip toward the $89,250 level following an 8% surge that preceded this latest pullback. This movement has effectively shifted the immediate market focus away from record-breaking attempts and back onto established support levels to determine the asset’s next direction.

The price action at $93,000 was characterized by a swing failure pattern (SFP), which occurred at this specific resistance level for the third time. This pattern suggests that despite the momentum seen during the initial surge, buyers were unable to sustain the breakout, leading to a quick reversal. Currently, Bitcoin is navigating a period of volatility as it tests the lower bounds of its recent trading range, specifically focusing on the area around $89,250. The rejection has prompted a re-evaluation of the current trend among market participants. While the initial surge was robust, the repeated inability to clear the $93,000 threshold has introduced a sense of caution.

Context

The current technical environment for Bitcoin is defined by a struggle between established bullish indicators and immediate bearish pressure. One of the most significant pillars supporting the current price structure is the monthly rolling volume-weighted average price (VWAP). Bitcoin continues to hold above this level, which notably turned bullish again at the start of 2026. This indicator often serves as a benchmark for high-volume traders, suggesting that the underlying trend retains some positive characteristics despite the recent rejection at higher levels.

At the local level, Bitcoin is currently engaged in testing a specific order block situated between $89,200 and $90,500. This zone is considered a key area of interest where bulls may attempt fresh entries. The interaction at this order block is crucial, as it represents the first major area of interest where momentum could flip positive. Furthermore, the broader market structure presents a contrast between different time frames. While the higher-time-frame structure appears fragile, the lower-time-frame signals offer a different perspective. If the critical support levels within the $89,200 to $90,500 range can be maintained, there remains a possibility for bulls to regain control of the narrative. This interplay between various technical markers creates a complex backdrop for Bitcoin as it attempts to stabilize following the recent 8% surge and subsequent rejection at the $93,000 resistance level.

Impact

The recent price dip from $92,000 toward $90,000 has had a measurable impact on market participation metrics, particularly regarding open interest. As the price declined, open interest climbed sharply, suggesting that market participants are actively entering new positions during the volatility. Specifically, the data indicates that short positions are being built near the $90,000 level. This rise in open interest during a price dip is often interpreted as a sign of aggressive bearish betting, as traders anticipate further downside or attempt to hedge existing positions.

This buildup of short positions creates a specific dynamic for the market’s next move. If Bitcoin manages to defend the $90,000 level effectively, the high concentration of shorts could lead to a short squeeze. In such a scenario, a sudden move upward would force those holding short positions to buy back the asset to cover their losses, potentially accelerating a recovery. The current concentration of interest around the $90,000 range highlights the intensity of the struggle for price control. With shorts building positions as the price slipped back from $92,000, the market is now tightly coiled. A failure to hold the $90,000 mark would likely validate the bearish sentiment seen in the open interest data, while a successful defense of this support would fundamentally shift the pressure back onto those who have bet against the market’s recovery.

Outlook

Looking ahead, the path for Bitcoin’s recovery or further correction depends on several specific price targets. For a bullish continuation, the first major hurdle is a recovery above $91,666. A decisive bullish engulfing pattern above this level would serve as the first confirmation that the upward trend remains intact. Such a move would effectively form a higher low on the lower-time-frame trend, providing the necessary momentum to potentially trap late short sellers who entered the market between $90,000 and $92,000. Building on this, a strong daily close above $91,700 is considered the primary signal for a renewed attempt at higher prices. Clearing this level would likely open the path for another test of the $93,000 resistance.

Conversely, the downside risks are clearly defined by the $89,000 level. If Bitcoin fails to maintain its position above $89,000, it would quickly expose internal liquidity located between $86,000 and $87,000. Such a breakdown would likely give sellers a clear downside target and could lead to a more prolonged period of consolidation or bearish movement. The market remains in a state of high tension as it waits for a definitive close above the $91,700 signal or a drop below the $89,000 threshold to dictate the next major trend. Sideways movement into the weekly close is possible as these levels are tested.