Bitcoin fell below $84,000 on Wednesday as a sudden market downturn triggered significant liquidations across the cryptocurrency sector. The selloff liquidated over $500 million in crypto long positions in a 24-hour period, according to CoinGlass data.
Bitcoin briefly dropped to $83,560 but found support at its 21-day moving average, currently positioned at $83,850. The price decline of up to 2.3% occurred over two hourly candles before bitcoin stabilized near $84,000.
Leverage Buildup Preceded the Drop
Analysis indicated that 40x-leveraged bitcoin shorts on Hyperliquid appeared immediately before the downside occurred. On-chain data revealed that four wallets used stablecoin USD Coin (USDC) to open shorts on 148.49 BTC with 40x leverage on Hyperliquid just before the overnight price decline.
Technical Support Levels
Despite trading 1.8% lower on the day, Bitcoin preserved support at its 21-day simple moving average near $83,850, a level previously identified as significant for shorter-term traders. The next key support sits at $82,500, which forms part of an inverse head-and-shoulders reversal pattern on the weekly chart and was last tested on September 28.
Trader and analyst Rekt Capital noted that a daily candle close above $86,700 would be required to confirm upside continuation in Bitcoin's setup.
Market Recovery Signs
Open interest immediately began to rebound after the liquidation event across 21 exchanges tracked by CoinGlass, suggesting traders were willing to increase BTC exposure at lower prices. Open interest increased from approximately $54.2 billion to $55.3 billion over a six-hour period between 4 a.m. and 10 a.m. UTC.
The move came after overhead resistance formed as ask liquidity thickened on exchange order books, preventing spot prices from rising past $86,500 on Tuesday.
