Short-term holders are retreating, showing reduced speculative appetite and weaker recent convictions.
The liquidation cluster is building close to $80K, increasing the risk of cascading sell-offs. As of April 4, Bitcoin [BTC] is hovering above $83,000. In fact, the entire cryptocurrency market is on edge, with signs indicating a potential drop below $80,000. Should this occur, technical models suggest a subsequent slide towards the $68K region.
Bitcoin rally unable to sustain
If BTC surged to a high of $88,580 following President Donald Trump’s announcement, this rally was short-lived. The price sharply declined as traders weighed the risks associated with global trade uncertainty. Not to mention, the market reacted quickly, with the S&P 500 dropping 4%—the largest daily loss since the pandemic lockdown began. This amounted to a decrease in value of approximately $3 trillion in U.S. stocks. Of course, cryptocurrency did not escape the panic, as Bitcoin fell to $82,220 that day and has since struggled to gain higher ground.
Is $80K the new Maginot Line?
Recent data shows buyers defending the $80K region. However, technical signals like the death cross are raising caution. Another concern arises from realized price data. Coins held for less than three months have sharply declined. These short-term holders have historically been associated with bullish phases, but currently, their accumulation is waning. In the past, short-term holder supply led Bitcoin’s biggest bull runs. At the time of writing, this figure has dropped below 15%. The decline indicates a reduction in speculative interest, reflecting a broader market cooling.
BTC open interest sinking, hopes fading
Additionally, open interest has decreased by 37.5% since the second half of 2024, dropping from $80B to below $50B, from $106K to $8.4K. Without leverage, price fluctuations tend to narrow—but sharp moves still occur when liquidation clusters form. The liquidation heatmap indicates where leveraged trades can unwind. The recent 7-day heatmap shows a substantial accumulation of long liquidations below $80K. If Bitcoin loses the $80,000 mark, analyst Joao Wedson suggests it could cascade down to $68,000.
MVRV wake-up call
Another danger signal is the MVRV ratio, which has fallen from 2.74 in November to below 2.0 in April, indicating faded speculation and a shift towards long-term holding. In fact, Exchange Netflows tell a similar story. Outflows are dominating, suggesting that investors are moving coins to cold storage rather than preparing to sell. For instance, on February 3 alone, over 60,000 BTC exited exchanges, marking one of the largest single-day outflows in months.
Conclusion
The takeaway? Sellers are not necessarily in a rush to exit. However, new buyers are not stepping in. Bitcoin positions above $80K are fragile. If that level breaks, it could move towards $68K with the consistency of bearish signals. With leverage fading and macro risks increasing, the coming days may determine whether this is a short-term dip or the beginning of a deeper consolidation.
