Bitcoin (BTC) has recently found itself hovering around a critical support level of $84,000, with many traders and analysts closely watching the situation. Despite Bitcoin holding above this point, the market shows signs of increasing pressure. Will the $84K level act as a trapdoor, triggering a wave of liquidations?

Bitcoin’s Struggle at $88,000: Warning Signs Emerge

Bitcoin’s recent price activity has seen it rise above $88,000, only to stall shortly after. This price movement caught the attention of many traders who entered long positions, expecting the bullish momentum to continue. However, recent data from Alphractal reveals a concerning trend: while Bitcoin saw rising Open Interest and inflows into exchanges, there was also a noticeable weakening in buyer momentum as the price stagnated above $88K.

As the price action slowed and began to consolidate, the Net Delta metric, which tracks buyer and seller momentum, started to fall. This suggests that while traders remained heavily invested in long positions, the market sentiment was cooling, and buyers were losing control. As a result, Bitcoin’s price teetering near $84K now represents a critical inflection point.

The $84K Level: A Potential Liquidity Trap

The $84,000 zone has emerged as a focal point for Bitcoin’s price action, with a high concentration of derivative contracts and institutional positioning. If the price falls below this level, it could trigger a sharp sell-off, as many traders who entered long positions above $88K may be forced to liquidate their positions.

This makes $84K not only a technical support level but also a potential liquidation trigger. The zone has become a battleground where buyers are likely to defend their positions, while sellers may look to capitalize on the forced liquidations of leveraged positions. If the price dips below $84K, it could quickly snowball into a wave of forced selling, further accelerating the price decline.

Increasing Inflows: A Bearish Signal?

In addition to the technical risks, data from CryptoQuant highlights a troubling trend of rising Bitcoin inflows to exchanges. These inflows historically signal that traders are preparing to sell, which adds to the bearish sentiment surrounding Bitcoin at the moment. In March 2025, Bitcoin transfers to exchanges spiked during times of increased volatility, such as when Bitcoin was priced around $84,311 on March 3rd. This activity reinforced the importance of the $84K level, as it became clear that some investors were looking to exit their positions.

Although Bitcoin’s inflows have since decreased, with 10,053 BTC moving to exchanges by March 27th, the market remains cautious. A failure to break through the $88K resistance could lead to more inflows, signaling that traders are preparing for a potential decline.

On-Chain Indicators: Reduced Speculation

On-chain data from Glassnode further supports the notion of a cooling market. The Realized Price of Bitcoin has steadily increased from $33,149 in November 2024 to $43,696 in March 2025. This indicates that long-term holders are seeing profits at higher levels. However, the MVRV Z-Score, which measures market value relative to realized value, has fallen from 3.42 to 1.99 in the same period. This suggests that the market is entering a phase of reduced speculative excess, rather than capitulating entirely.

Historically, MVRV Z-Scores above 5 have signaled market tops, while scores around 2 suggest mild overvaluation. The current score indicates that the market is not experiencing full capitulation but is showing signs of caution and a potential slowdown in bullish momentum.

The Path Ahead: Will Bitcoin Hold Above $84K?

Bitcoin’s price remains near $86,000, hovering just above the critical $84,000 support zone. As it stands, the market shows signs of hesitation, with cautious accumulation on exchanges and a buildup of long positions in derivatives. However, on-chain data and technical indicators suggest weakening momentum, and a break below $84,000 could set off a wave of liquidations, particularly for those who entered long positions during the previous surge above $88K.

On the other hand, if Bitcoin can maintain its support above $84,000 and continue forming higher lows, the bullish structure could remain intact, and the market may attempt another push toward new highs. All eyes are now on the $84K level, which could be the key to Bitcoin’s next major move.

In conclusion, Bitcoin’s current position above $84,000 is critical. While the risk of liquidation is rising, a solid defense at this level could maintain the bullish trend. Traders and investors alike will be closely monitoring this zone for signs of either a breakout or a breakdown in the coming days.