I was offered a job with the condition of receipt of satisfactory reference from my previous employer. However they haven't received any reference yet and I started today - signed the contract and everything. I don't know why my employer hasn't provided a reference yet, or if they even will. But if they do within the next few weeks, and it's bad, can this job be retracted (even though Ive already started)?

Doubtful that you will be fired.
However, if you are in the US, it is also doubtful that you signed a "contract". Most likely you signed an "offer of employment". This is not a contract and probably says it is not a contract.