Bitcoin price started a recovery wave from $86,000. BTC is slowly moving 
higher and might rise further if it clears $89,500. Bitcoin started a minor 
recovery wave from the $86,000 level. The price is trading near $88,500 and 
the 100 hourly simple moving average. There was a break above a bearish trend 
line with resistance at $88,000 on the hourly chart of the BTC/USD pair (data 
feed from Kraken). The pair might recover if it manages to settle above 
$88,800 and $89,500. Bitcoin Price Attempts Rebound Bitcoin price extended 
losses and traded below the $87,200 support. BTC even declined below $86,500 
before the bulls appeared. A low was formed at $86,007, and the price is now 
attempting a recovery wave. The price climbed above the $87,000 and $87,500 
levels. There was a move above the 50% Fib retracement level of the downward 
move from the $91,099 swing high to the $86,007 low. Besides, there was a 
break above a bearish trend line with resistance at $88,000 on the hourly 
chart of the BTC/USD pair. Bitcoin is now trading near $88,500 and the 100 
hourly simple moving average. If the price remains stable above $87,500, it 
could attempt a fresh increase. Immediate resistance is near the $88,800 
level. The first key resistance is near the $89,150 level since it is close to 
the 61.8% Fib retracement level of the downward move from the $91,099 swing 
high to the $86,007 low. A close above the $89,150 resistance might send the 
price further higher. In the stated case, the price could rise and test the 
$89,500 resistance. Any more gains might send the price toward the $90,000 
level. The next barrier for the bulls could be $91,000 and $91,500. Another 
Decline In BTC? If Bitcoin fails to rise above the $88,800 resistance zone, it 
could start another decline. Immediate support is near the $88,000 level. The 
first major support is near the $87,200 level. The next support is now near 
the $86,700 zone. Any more losses might send the price toward the $86,200 
support in the near term. The main support sits at $86,000, below which BTC 
might struggle to recover in the near term. Technical indicators: Hourly MACD 
– The MACD is now gaining pace in the bullish zone. Hourly RSI (Relative 
Strength Index) – The RSI for BTC/USD is now above the 50 level. Major Support 
Levels – $88,000, followed by $87,200. Major Resistance Levels – $88,800 and 
$89,500.

Bitcoin Price Recovery Attempts Rise, But Upside Remains Challenged

Bitcoin is hovering at a critical demand zone as the market braces for the 
possibility of further downside. After losing the $87,000 level, price action 
remains fragile, with buyers struggling to regain control and sell-side 
pressure intensifying during rebounds. The broader risk-off mood frames the 
latest drop as a response to growing macro uncertainty rather than a purely 
technical move. Related Reading: Bitcoin Indicator Falls Back To Post-Bear 
Market Levels: Investors Approach A Key Decision Point Rising political 
instability in the United States appears to have acted as the near-term 
trigger. Prediction markets now place the probability of a new government 
shutdown at roughly 78%, with federal funding set to expire on January 30, 
2026. As bipartisan negotiations stall, political risk is once again being 
priced into markets, weighing on sentiment and pushing traders toward 
defensive positioning. In this environment, Bitcoin broke below $87,000 and 
sparked a fast liquidation cascade. Data shows that around $170 million in 
leveraged long positions were wiped out within 60 minutes, with total long 
liquidations reaching roughly $320 million over the following four hours. 
Nearly $40 billion in total crypto market value vanished in a short span, 
highlighting how quickly volatility can expand when liquidity is thin. The 
speed and structure of the move suggest a derivatives-driven deleveraging 
event rather than broad spot capitulation. That distinction matters because it 
implies the next phase will depend on whether forced selling fades and real 
demand returns at this level. Liquidations And OI Reveal A Deleveraging-Led 
Drop A report from XWIN Research Japan explains that Bitcoin’s latest flush 
was likely amplified by a wave of forced liquidations in the derivatives 
market. Liquidations occur when futures positions fall below their maintenance 
margin and are automatically closed by exchanges to prevent further losses. In 
this case, a large share of the risk was concentrated in leveraged long 
positions, which are commonly used by short-term traders as well as hedging 
and arbitrage participants. Many of these longs were positioned for a renewed 
2026 uptrend, making the market vulnerable once the price slipped under key 
support. When the decline accelerated, liquidation orders hit the books as 
market sells. Which can intensify downside moves in thin liquidity 
environments. To understand whether this was a structural shift or simply a 
leverage reset, XWIN points to Open Interest (OI). OI measures the total size 
of outstanding futures contracts and reflects how much leverage remains 
embedded in the market. When price falls alongside declining OI, it typically 
signals that position unwinds and liquidations are driving the move rather 
than a sudden change in fundamentals. On-chain estimates place aggregate OI 
near $28.4 billion. Well below the roughly $47 billion peak in late 2025, 
showing that leverage had already reduced. Still, OI has stabilized and 
slightly rebounded in early 2026, leaving room for volatility during 
corrections. The key is what comes next: whether selling fades, spot demand 
absorbs supply, and leverage normalizes as participation returns. Related 
Reading: Bitcoin Stuck In Bear Mode For 83 Days: Trend Pulse Confirms 
Structural Weakness Bitcoin Slides As Key Moving Averages Turn Into Resistance 
Bitcoin is trading near $87,820 after a steady decline that has kept the price 
pinned below $90,000. The structure shows BTC losing momentum after failing to 
hold the mid-January breakout toward $98,000. Followed by a sharp reversal 
that shifted market control back to sellers. Since that rejection, price has 
printed a sequence of lower highs, with selloffs accelerating each time BTC 
attempts to reclaim overhead levels. From a trend perspective, the moving 
averages highlight how the short-term regime has flipped bearish. BTC is now 
trading below the 50-period moving average (blue) near $90,300 and below the 
100-period moving average (green) around $91,955, both of which are sloping 
downward. These levels are now acting as dynamic resistance, reinforcing the 
idea that traders are selling rallies. The 200-period moving average (red) 
sits close to $90,756, creating a tight resistance cluster between $90.3K and 
$92K. Bulls must reclaim this cluster to rebuild momentum. Related Reading: 
XRP Distribution Phase Continues, But Funding Rates Suggest Shorts Are 
Overextended Support is developing around the $87K–$88K zone, which has acted 
as a short-term demand pocket during prior pullbacks. If buyers fail to defend 
this area, downside risk opens toward $86,000 and potentially the mid-$84K 
range. BTC needs a clean reclaim of $90K, followed by consolidation above the 
moving-average band. Signaling that demand is returning with strength. 
Featured image from ChatGPT, chart from TradingView.com

Bitcoin Breaks Below $87K As Political Risk Spikes – Liquidations Reveal The Real Driver

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Cryptocurrency price in TWD