Bitcoin Faces $84,000 Support Test Amid Liquidation Fears

Bitcoin is currently approaching a critical support level of $84,000, which has raised concerns among traders about potential liquidation risks. The market is closely monitoring buyer behavior and technical indicators for any signs of a sell-off. According to a source from COINOTAG, if prices dip below this level, market makers may accelerate the move by exploiting trapped longs, leading to significant market shifts.

Recent data from Alphractal indicates that Bitcoin’s Open Interest is rising, along with increased inflows into exchanges. This trend suggests a heightened liquidation risk as traders increase their leverage surrounding the recent price rallies. Bitcoin’s price surged past $88,000 before losing momentum, leading to a significant buildup of leveraged positions around this price point. As the price stagnated above $88K, a falling Net Delta signaled that buyers were losing their grip, even with a consistent commitment to long positions. A sharp price reversal below the crucial $84,000 level would ignite a battleground dynamic for new and existing traders.

Many traders who entered at or above $88K face potential liquidation if the price breaches this critical support level. This $84K zone, characterized by a hefty concentration of long positions, serves as a dual-purpose point: technical support and a potential liquidation trigger. A breakdown below this level could instigate significant forced selling, primarily impacting those with leveraged long positions, while benefiting short sellers positioned earlier in the rally.

Concurrently, data from CryptoQuant reveals a surge in Bitcoin transfers to exchanges this March, a historically reliable indicator of impending selling activity. From January to March 2025, Bitcoin fluctuated between a high of $105,000 and $86,911, with marked inflow spikes correlating to increased volatility. Notably, 31,152 BTC moved to exchanges on March 3rd when Bitcoin was priced around $84,311, underscoring the critical nature of the $84K region. By March 27, inflows reduced significantly to just 10,053 BTC, hinting at trader hesitation as optimism wanes. An inability to push through higher price points could trigger additional inflows as traders react to falling prices.

Outflows also demonstrated a significant drop from 86,230 BTC in February to 10,186 BTC by March 27, indicating a notable decline in accumulation and an increasing caution among market participants. If long-term holders continue to step back from their positions, the bullish support might be gradually diminishing.

Data from Glassnode illustrates an upward trend in Bitcoin’s Realized Price, which climbed from $33,149 in November 2024 to $43,696 in March 2025. However, while the Realized Price increased, the MVRV Z-Score fell from 3.42 to 1.99 over the same period, indicating a reduction in speculative enthusiasm rather than a complete market capitulation. Historically, scores above 5 signal market tops, whereas a score near 2 suggests mild overvaluation.

Currently, Bitcoin is trading around $86,000 and remains above the $84,000 support level. Exchange data depicts cautious accumulation, while derivatives indicate a significant long exposure among traders. Nonetheless, on-chain metrics point to a tapering momentum. Should prices dip below that $84,000 threshold, a wave of liquidations could happen, favoring those who took short positions at higher price levels. Alternatively, a strong defense of this support level could help preserve the bullish trend of higher lows, with traders eagerly anticipating the next significant market movement.