Bitcoin Breakout Fails at $90,500: Why This Rejection Signals a New Trading Opportunity

Why This Rejection Signals a New Trading Opportunity

Bitcoin struggling to maintain momentum as it rejects from the $90,500 liquidity ceiling.

The Bitcoin breakout has officially hit a wall. After coming incredibly close to a major trendline resistance, the market witnessed a sharp rejection, dragging the price down by approximately 4%. This move wasn't random; it was a surgical strike at a key liquidity level we identified yesterday at $90,500.

The Liquidity Trap: Why the $90,500 Rejection Happened

As anticipated, Bitcoin swept the liquidity above the recent highs but failed to sustain momentum. This rejection confirms that the trendline area remains a formidable barrier for the bulls.

Liquidation Heatmap Insights

Despite the push upward, the past 24 hours only saw $63 million in short liquidations. This relatively low figure suggests that the "short squeeze" hasn't fully played out yet, leaving room for a potential bounce in the coming days. However, the immediate acceptance below the Value Area High ($89,000) signals a rotation toward the Value Area Low.

CVD and Bullish Divergence

Interestingly, while the price action looks bearish, the CVD (Cumulative Volume Delta) indicator is showing a brand-new lower low while Bitcoin maintains a higher low. This is a classic Bullish Absorption signal, suggesting that sellers are being exhausted despite the price dip.

The Bullish Absorption signal: CVD showing lower lows while price maintains higher support levels.

Strategic Trade Setups: Shorting the Top, Buying the Floor

In professional trading, we don't chase the move; we anticipate the levels. Currently, I am holding a short position from the $90,163 area, but my eyes are already on the next "Long" entry.

The Golden Support Zone: $86,700

Level Type	Price Target	Importance & Strategy
Major Resistance	$90,500	Liquidity rejection zone; No new longs here.
Immediate Support	$88,000	20-day EMA; Intraday bounce area.
Golden Support	$86,700	Golden Fibonacci Ratio; Primary Buy Zone.
Critical Pivot	$85,700	Value Area Low; Loss of this level turns bias bearish.
Bearish Target	$80,000	Elliott Wave 5 target if support fails.

If Bitcoin continues its descent, the most critical support level to watch is the Golden Fibonacci Ratio at $86,700.

• Support 1: $86,700 (Golden Pocket & Previous Low).
• Support 2: $86,600 (Liquidity Cluster).

This area is where I will be taking profits on my shorts and looking to fire brand-new long trades for XRP, Ethereum, and Solana.

Pro Tip: "This strategy of moving from Value Area High to Value Area Low is a consistent winner. For a deeper understanding of how institutional players engineer these moves, check our XRP Price Engineering analysis. Understanding these liquidity gaps is key to surviving the 2026 Bitcoin cycle."

 

The Bearish Pivot: What if $85,700 Fails?

While the outlook remains cautiously bullish above the support, we must have an invalidation plan.

• Critical Level: $85,700 (Daily Support & Value Area Low).
• The Bearish Scenario: If we lose $85,700, Bitcoin could trigger the 5th Elliott Impulsive Wave, potentially targeting the $80,000 to $75,000 zone.

Frequently Asked Questions (FAQ)

Q1: Why did Bitcoin drop after hitting $90,500? A: Bitcoin faced a major trendline rejection and swept the liquidity above the previous highs. Large institutional players often use these levels to fill "short" orders, leading to a temporary price dip.

Q2: Is the $86,700 level safe for a long trade? A: Technically, $86,700 aligns with the Golden Fibonacci ratio and previous liquidity clusters, making it a high-probability bounce zone. However, always use a stop-loss below $85,700.

Q3: What happens if Bitcoin breaks below $85,000? A: A sustained close below $85,700 (Value Area Low) would signal a trend shift, potentially opening the doors for a deeper correction toward the $80,000 or even $75,000 levels.

Disclaimer: This analysis is for educational purposes only and does not constitute financial advice. Always do your own research before trading.