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11.03.2025 01:16 AM
Bitcoin at Risk: Will the Trend Reverse After Mass Liquidations?

The past few weeks have posed a significant challenge for Bitcoin. In just a few days, its price fell below $85,000, leading to a wave of liquidations and causing investor panic. This represents a 14% decline compared to levels from the previous week, raising concerns about the potential end of the current bullish cycle.

The main reason for this drop was the mass closure of long positions on major cryptocurrency exchanges. According to Coinglass, total liquidations in the past 24 hours reached $619 million, marking one of the largest figures seen in recent months.

Notably, Bybit and Binance accounted for most forced liquidations, with Bitcoin leading among liquidated assets, followed closely by Ethereum.

But is this the beginning of a large-scale bear market, or just a temporary pause before another upward surge? Let's analyze the situation.

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Are Bitcoin Holders Ready for a New Breakthrough?

Despite the panic, analytical indicators suggest a possible recovery. One key signal is the Cumulative Value Days Destroyed (CVDD) indicator, which tracks long-term holder activity and capital movement. According to CryptoQuant, this metric signals the potential start of a new bullish trend.

What does this mean in practice? If Bitcoin holds above $80,000 and consolidates within the $84,000 – $86,000 range, the likelihood of a new upward move increases significantly. In this case, BTC could set its sights on $100,000.

However, if selling pressure persists and Bitcoin falls below $80,000, it could trigger a further decline. Critical support levels in this scenario are $78,000 and $72,000.

Liquidations and Investor Fear: What Do the Numbers Say?

According to Coinglass, over the last 24 hours, liquidations affected more than 222,000 traders, with long position holders suffering the most losses. In total, $527 million worth of long positions were liquidated, compared to just $93 million in short positions. This indicates that the market experienced a sharp surge in volatility, forcing inexperienced traders to capitulate.

Market sentiment has also been heavily impacted by the Fear & Greed Index, which has dropped to 20, signaling extreme fear among participants. Historically, such moments have often marked local reversals and the beginning of new growth. However, Bitcoin could remain under pressure this time without a strong catalyst.

Why Isn't the Market Reacting to Fundamental Drivers?

The market remains sluggish despite a series of positive developments—including creating a strategic Bitcoin reserve in the U.S. and a crypto summit at the White House. Analysts at Matrixport highlight the lack of significant interest from retail investors and low funding rates for Bitcoin, Ethereum, and Solana futures as key issues. This suggests that bullish momentum has not yet gained sufficient strength.

During periods of strong growth, funding rates typically reach high double-digit figures, whereas they currently remain at moderate levels. Even Donald Trump's inauguration, previously considered a potential catalyst for Bitcoin's rise, has not led to significant market movement.

Conclusion: What's Next for Bitcoin in the Coming Weeks?

Bitcoin is at a critical juncture: it must either consolidate above $84,000 and regain bullish momentum or break below $80,000 and continue its downward correction. In the coming weeks, investors should closely watch the following key levels:

  • Above $86,000: Confirmation of an uptrend, with a target of $100,000 and potentially $128,000.
  • Between $80,000 – $84,000: A zone of uncertainty where bulls and bears will battle to control the market's direction.
  • Below $80,000: There is a high risk of further decline, with potential targets at $78,000 – $72,000.

This current uncertainty presents opportunities for both traders and long-term investors. However, given the high volatility, caution and risk management are essential. Bitcoin remains the most dynamic asset in the market, meaning surprises are still ahead.

Ekaterina Kiseleva,
Analytical expert of InstaForex
© 2007-2025
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