Bitcoin Price Action Dips Below $90K on Venezuela Airstrike News

VADODARA, January 3, 2026 — Bitcoin price action broke below the $90,000 psychological support level following news of a U.S. airstrike in Venezuela, according to Cointelegraph. The cryptocurrency peaked at approximately $90,940 before reversing, with market structure suggesting a classic liquidity grab amid escalating geopolitical tensions. This event tests Bitcoin's correlation with traditional risk assets and its role as a digital gold substitute during periods of macro instability.

Market Context & Background

Market context indicates this move mirrors historical patterns where geopolitical shocks trigger short-term volatility in crypto markets. Similar to the 2021 correction driven by regulatory fears, Bitcoin's price action often experiences sharp, sentiment-driven sell-offs before resuming its longer-term trend. The current environment is compounded by a Fear & Greed Index score of 29, reflecting extreme caution among traders. On-chain data from Glassnode shows increased exchange inflows, suggesting profit-taking or hedging behavior. Related developments include a Bitcoin futures long-short ratio nearing equilibrium, indicating balanced positioning ahead of the event, and regulatory progress reports from Coinbase that may influence mid-term sentiment.

What Happened?

On January 3, 2026, Bitcoin fell below $90,000 after reports of a U.S. airstrike in Venezuela surfaced via Cointelegraph. The price action saw a rejection at $90,940, forming a bearish order block that accelerated selling pressure. According to the source text, many analysts believe the drop will be temporary if geopolitical tensions do not escalate further. Concurrently, gold corrected from an all-time high, while Bitcoin had risen around 5% since Christmas, raising speculation about capital rotation from traditional safe-havens to digital assets. Market structure suggests this is a liquidity grab targeting stop-losses below key support levels.

Technical Analysis & Price Action

Technical analysis reveals a clear breakdown from the $90,940 resistance, creating a Fair Value Gap (FVG) between $90,000 and $89,500. The Relative Strength Index (RSI) on the 4-hour chart dipped into oversold territory, indicating potential for a short-term bounce. Volume profile shows increased selling volume at the breakdown point, confirming the liquidity grab. Key moving averages, such as the 50-day EMA at $88,200, provide dynamic support. Bullish invalidation is set at $88,500, a critical order block from previous consolidation; a break below this level would signal deeper correction. Bearish invalidation lies at $90,940, where reclaiming this high would negate the current downtrend structure. Historical cycles suggest such geopolitical-driven moves often resolve within 1-2 weeks, similar to the EIP-4844 implementation volatility in 2024.

By The Numbers

Why It Matters

This event matters for institutional portfolios assessing Bitcoin's hedge characteristics during geopolitical crises. According to the Federal Reserve's research on asset correlations, Bitcoin has shown decreasing beta to traditional markets, but shocks like this test its resilience. For retail traders, the liquidity grab highlights the importance of risk management around key psychological levels. The potential capital rotation from gold to BTC, as noted in the source, could signal a longer-term shift in safe-haven flows, impacting asset allocation strategies across both cohorts.

Community Sentiment

Community sentiment on X/Twitter is divided. Bulls argue this is a temporary dip, citing Bitcoin's 5% rise since Christmas as evidence of underlying strength. One analyst posted, "Geopolitical FUD creates buying opportunities—watch the $88.5k level for accumulation." Bears point to the breakdown below $90,000 as a warning sign, with some referencing increased stablecoin transfers to DeFi protocols, as seen in a recent $400M USDT move to Aave, indicating defensive positioning. Overall, sentiment aligns with the Fear Index, emphasizing caution over conviction.

Price Prediction / Future Outlook

Bullish Case: If geopolitical tensions de-escalate, Bitcoin could reclaim the $90,940 level, invalidating the bearish structure. Market structure suggests a rally toward $92,000 as the next resistance, supported by post-merge issuance dynamics reducing sell pressure. Historical patterns from 2021 show quick recoveries after similar shocks, with on-chain data indicating accumulation by long-term holders.

Bearish Case: Escalation in Venezuela or broader macro risks could push Bitcoin below the $88,500 bullish invalidation level. This would target the $85,000 support zone, a Fibonacci retracement level from the recent uptrend. Volume profile indicates weak buying interest at current levels, risking a gamma squeeze in derivatives markets if volatility spikes further.