Bitcoin price retraces after early 2026 rally as bullish bets face technical weakness

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BTC three-day losing streak weakens outlook

Highlights

Bitcoin slips below 50-day EMA after 3% drop triggers short-term technical breakdown
Short-term RSI turns bearish as $89,700 level struggles to hold during Thursday’s session
Long-short ratio climbs above 2.0, but flat open interest shows weak capital commitment

As of the European session on Thursday, January 8, Bitcoin is trading near $89,700, reading a fresh intraday loss of 1.6%. This brings week-to-date performance to a negative 2%, confirming that the recent bullish momentum is being challenged. The intraday decline builds on the prior day’s selloff, which also triggered a short-term trend shift. On the 1-hour chart, the 20 EMA has now crossed below both the 50 and 100 EMA, a bearish signal that indicates increasing pressure on short-term traders.

Bitcoin price dynamics (Dec 2025 - Jan 2026). Source: TradingView

Despite the price retracement, Bitcoin is finding temporary support on the 20-day EMA. Price action appears to be stabilising slightly near this level, but key momentum indicators suggest the weakness may not be over. On the 4-hour chart, RSI has slipped into bearish territory, reflecting growing downside momentum. The daily RSI is hovering near the neutral 50 level. A further breakdown below this could shift the broader trend into a more prolonged bearish phase that risks erasing the remaining gains for the year.

Long-short ratio climbs, but flat open interest questions longs conviction

While price action has softened, derivatives data suggest dip buyers are stepping in. The long-to-short ratio has climbed from 1.3 to above 2.0 over recent sessions, showing increased confidence from bullish traders. At the same time, the funding rate has held strongly positive, indicating that long positions are paying a premium to stay open. These signals suggest a segment of the market still views the current drop as a pullback rather than a reversal.

However, open interest across major exchanges has stayed flat at around $30 billion. This sideways movement implies that although longs are rising, total capital commitment is not expanding. That lack of broad conviction adds uncertainty to the immediate outlook and could leave BTC price vulnerable if technical indicators deteriorate further.

In recent analysis, we discussed how Bitcoin consolidated between $92,200 and $93,000 after a 1.6% Asian-session drop. Tuesday’s $243 million ETF outflows erased gains as FBTC and GBTC led the selloff.

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