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Bitcoin fell sharply towards $89,190 before recovering and recovering to the $90,800 area at the time of writing. Despite the volatility, price action remains constructive. Bitcoin is now trading almost flat intraday with a 7-day gain of about 2.7%.
What matters now is not the drop itself, but what is formed underneath. Momentum remains in sync, spot buyers added during the period of weakness, putting investment derivatives quietly gathering fuel near key levels.
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RSI confirms torque alignment as the cup and handle structure continues
Bitcoin continues to trade Within a developing cup and handle pattern on the daily chart. This structure is formed when the price approaches a base, stops through a handle, and then attempts to break above the resistance.
The recent decline in the $89,190 area helped deepen the handle rather than destroy the pattern. Momentum remains supportive. The relative strength index, or RSI, tracks price momentum. When the RSI moves in the same direction as the price, it confirms the strength of the trend.
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Between December 9 and January 5, Bitcoin hit all-time highs, and the RSI hit an even higher high. This alignment shows that momentum moves with price, not against it. No bearish divergence has appeared, which reduces the risk of a near-term collapse.
Two hurdles remain. Bitcoin must first bypass The upper limit of the handle then breaks the neckline. Until those levels are recovered, the encounter remains only a prelude and not a confirmation.
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The instantaneous accumulation increases as the pressure rises at the site of the derivatives
The chain’s data shows that long-term bondholders did not sell in the dip. They added.
Hodler measures the net position change if long-term holders accumulate or distribute Bitcoin. On January 6, when Bitcoin traded close to $93,700, the benchmark was around 9,933 bitcoins (BTC). Amid yesterday’s decline, it rose to around 12,322 BTC.
This means an increase of about 2,400 BTC in two days, i.e. an increase of about 24% in the accumulation during weak prices. This change is important because the shares continue to sell off the markets until the end of December despite occasional price drops. This behavior has now changed.
At the same time, the position of derivatives was very biased in one direction. Show settlement data from perpetual futures contracts It is the cumulative exposure to short liquidation That’s about $3.9 billion, compared to about $2.3 billion on the long side. This means that short selling exceeds buying by about 70%.
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This imbalance creates pressure. If the price rises, short positions are forced to close, adding buy orders to the market. This dynamic often accelerates breakouts once key resistance levels are breached.
The main short liquidation pool is around $94,820, with around $2.6 billion of cumulative short exposure stacked around this level. This area corresponds closely with the neck of the cup and the structure of the handle, which we will discuss later.
In simple terms, the accumulation of the place is building the foundation, while putting leverage is piling breakout fuel above the price, which are the two catalysts behind the hope of a breakout.
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Bitcoin price levels determine if the 12% Breakout is what the Breakout is If the 12% Breakout is what it does
Bitcoin price levels now determine the outcome. The first hurdle is near $92,390. A sustained move above this level will break Bitcoin from the handle.
The next and most important level is about $94,900. A daily close above this zone will cross the neckline and push the price directly beyond the largest short liquidation range as highlighted earlier. This movement may continue to cause forced sales coverage.
If that happens, a transition marked by a cup and handle structure would suggest an upside of about 12%, targeting the area of ​​$104,000 to $107,250. Temporary resistance may appear near $96,700.
The downside risk remains identifiable. Maintaining stability above $88,340 keeps Bitcoin’s price structure intact. A break below $86,560 will weaken the pattern. Any move below $84,310 will cancel the amount completely.
Now, Bitcoin is not collapsing. Momentum is consistent, long-term holders add during weakness, and leverage is positioned in a way that can amplify any upside movement. If the price picks up the handle and the neck, the fuel for a discovery is already there.
