Recent market activity indicates a potential shift in sentiment among U.S. Bitcoin traders, raising concerns about a possible price correction. After a period of strong recovery from December lows, Bitcoin is consolidating just below a major resistance level. Several factors contribute to this bearish outlook, including geopolitical tensions, regulatory uncertainty, and technical indicators.
Bitcoin's price experienced a nearly 3% drop, falling to around $92,000, driven by global trade tensions and a broader market sell-off. This resulted in over $870 million in liquidations, primarily affecting long positions. The escalating trade tensions between the U.S. and the European Union, sparked by potential tariffs, have triggered risk-off sentiment, leading investors to seek safe-haven assets. This situation is further complicated by regulatory uncertainty in the U.S., contributing to the downward pressure on Bitcoin.
Technical analysis reveals that Bitcoin is trading around the $95,000 resistance band, which coincides with the lower boundary of a broader supply area and the 100-day moving average. This zone has acted as a price cap since November, making it a crucial level to watch. A rejection at this level could trigger a corrective phase towards recently established support levels, with $90,000 identified as the first notable support layer.
On the four-hour time frame, Bitcoin is currently trending bearish, with the 50-day moving average sloping downwards. The Relative Strength Index (RSI) on the daily chart is also pointing downwards, indicating fading bullish momentum. A break below the $92,000 level could weaken the structure, while a deeper break under $89,200 would invalidate the pattern entirely.
Despite the short-term bearish outlook, institutional demand for Bitcoin remains strong. Spot Bitcoin Exchange Traded Funds (ETFs) recorded inflows of over $1.4 billion last week, the highest since early October. This suggests that long-term investors continue to see value in Bitcoin, which could provide support and prevent a significant price crash.
Looking ahead, Bitcoin's price is expected to trade within the $92,000–$98,000 range in January 2026, as traders await a clearer directional catalyst. A confirmed breakout above $100,000–$105,000 would be required before BTC can target higher resistance zones near $110,000–$120,000. However, macro risks, including policy changes and global uncertainty, could trigger temporary pullbacks towards $85,000–$90,000.
While some analysts predict a continued upward trajectory for Bitcoin in 2026, with forecasts clustering between $100,000 and $230,000, the current market conditions suggest a period of consolidation and potential volatility. Whether Bitcoin can maintain its bullish structure and avoid a significant drop below $90,000 remains to be seen, as various factors continue to influence market sentiment and price action.
