Why did the Q1 breakthrough, which exceeded expectations, quickly disintegrate behind Bitcoin's surge and pullback?

Bitcoin initially followed the US dollar to weaken and briefly rose during the Asia-Pacific morning session, but ultimately failed to break through the $92,000 level, and after the European market opened, it sharply retreated. This seemingly ordinary intraday fluctuation reflects a deeper issue: the market’s optimism about a breakout in Q1 is rapidly fading, and Bitcoin still faces stubborn structural pressures.

The True Signal Behind the Rebound and Retreat

According to QCP Capital’s analysis, Bitcoin’s performance today can be divided into two phases. In the morning, influenced by the controversy over the Federal Reserve’s independence, market risk appetite increased, the US dollar plummeted, and Bitcoin, gold, and silver rose in unison. At this moment, the market seemed to be re-evaluating Bitcoin’s role as a hedge.

However, this upward momentum is clearly insufficient. Bitcoin failed to stabilize above $92,000 and instead quickly retreated after the European market opened. This pattern is not new — it has recurred multiple times in Q4 last year. What does this indicate? It shows that every seemingly favorable narrative hits an invisible ceiling.

How Strong Is the Technical Resistance?

From the price data, Bitcoin is currently at $90,577.65, with recent performance showing weakness:

In the context of a 2.52% decline over 7 days, the small rebound in a single day appears somewhat pale. More importantly, Bitcoin has been facing structural resistance since October 10, which is not just short-term technical pressure but a deeper market balance issue.

Signals of a Market Sentiment Shift

The derivatives market already reflects a change in investor expectations. According to the latest news, longs are not adding positions at current prices but are instead rolling over high-strike call options to March. This detail is crucial — it indicates that traders remain optimistic about the future but have little expectation of a breakthrough in the near term, instead betting on longer-term opportunities.

This aligns perfectly with the statement that “market optimism about a Q1 breakout is waning.” Psychologically, the market’s bullish consensus is breaking down.

What to Watch Closely Next

The coming days could be pivotal:

• January 13 US CPI data: a key inflation indicator that directly influences Federal Reserve policy expectations
• January 14 US Supreme Court tariff ruling: could trigger chain reactions in global risk assets
• The ongoing development of the Federal Reserve independence issue: it remains unclear how the Department of Justice’s subpoenas will evolve

Any of these events could change market attitudes toward risk assets and, consequently, Bitcoin’s performance.

Summary

Bitcoin’s rebound today is not an isolated event but a reflection of a shift in market sentiment. The failure to hold above $92,000, the rolling over of bullish options in the derivatives market, and the fading optimism all point in the same direction: expectations for a Q1 breakout are being reassessed. Structural resistance remains, and investor patience is being tested. The upcoming macroeconomic data and policy developments will determine whether Bitcoin can find a new breakthrough or continue to oscillate under pressure.