Bitcoin’s Critical Test: Can $90,000 Support Hold Amidst Market Pressure?

Bitcoin’s robust start to 2026 has given way to a period of consolidation, with its price now grappling to maintain a foothold above the psychologically significant $90,000 level. A combination of aggressive liquidations and waning institutional interest from the United States is applying considerable downward pressure. Although the long-term outlook remains supported by new institutional products, short-term caution and regulatory ambiguity are currently dictating market sentiment.

A key source of current weakness stems from diminished buying activity among U.S. investors. This is evidenced by the Coinbase Premium Index, which measures the price gap between the U.S.-based Coinbase exchange and international trading platforms, moving into negative territory. This shift indicates that American institutions and retail traders are net sellers during U.S. trading hours.

Market participants are closely watching Washington, D.C., with a major regulatory milestone on the horizon. The U.S. Senate Banking Committee has scheduled a hearing on the Digital Asset Market Transparency Act for January 15, 2026. This impending event is fostering a wait-and-see approach among major capital allocators, contributing to the current demand vacuum.

Liquidation Cascade and Rising Short Bets

The immediate selling pressure is largely a self-correction within the market, flushing out overextended bullish positions. Data shows that approximately $285 million worth of cryptocurrency derivatives positions were liquidated over a 24-hour window, with the majority being bets on higher prices. This long squeeze has accelerated the decline.

Should investors sell immediately? Or is it worth buying Bitcoin?

Interestingly, open interest—the total number of outstanding derivative contracts—has increased by nearly 4% despite the price weakness. Market analysts interpret this divergence as a sign that traders are aggressively opening new short positions, speculating on further losses. Bitcoin currently trades at $90,298.00, clinging to a precarious position just above its crucial support zone.

Institutional Backdrop Offers a Silver Lining

Despite the short-term gloom, which has pushed the Crypto Fear and Greed Index to a reading of 28 (Fear), the foundational institutional narrative shows resilience. In a significant development this week, Morgan Stanley applied to launch new crypto-focused investment vehicles, signaling continued professional interest.

Macroeconomic conditions also provide a potential tailwind. With U.S. inflation cooling to 2.7%, expectations for interest rate cuts later in the year persist, a scenario historically favorable for non-yielding assets like Bitcoin.

The $90,000 threshold is now the focal point for traders. A decisive and sustained break below this support during the ongoing consolidation could trigger a test of the $88,000 region. A sustained recovery in price action likely hinges on two factors: clarity from the mid-January regulatory hearings and a resurgence in buying momentum from U.S. investors.