Analysis: Bitcoin Key Support Level is Near $89,200, Traders Still Buying the Dip with Leverage

January 9 (CoinDesk) — Bitcoin bounced back to ~$90,500 on Wednesday, after briefly dipping to ~$89,300 and testing support at its 50-day moving average (~$89,200). It marks the crypto’s third straight day of pullback, following a Monday surge to nearly $95k. Crypto trading firm Wintermute cited low trading volume and profit-taking as the main drivers of the decline. “After a post-New Year risk appetite rebound, the market failed to break above the key $95k level—sparking two days of volatile trading, with ETF outflows leading the charge,” said Jake Ostrovskis, Wintermute’s OTC trading lead. “The Fed’s recent downward revision of rate cut expectations has also weighed on the market.” CME FedWatch data shows the probability of a Fed rate cut at its Jan. 28 meeting is now just 11.6%—down from 15.5% a week ago and 23.5% a month prior. Derivatives metrics reveal rising market leverage: Bitcoin perpetual futures funding rates remain positive (~0.09%), meaning longs are paying shorts to maintain positions. The sustained positive rate during the pullback signals traders are still leveraged dip-buying. If prices fail to extend gains, this concentrated long structure raises liquidation risk: even a modest drop could force leveraged traders to unwind, adding extra selling pressure.